UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to ........
Commission file number 1-10307
IMPERIAL HOLLY CORPORATION
(Exact name of registrant as specified in its charter)
Texas 74-0704500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Imperial Square, Suite 200, P.O. Box 9, Sugar Land, Texas 77487
(Address of principal executive offices, including Zip Code)
(713) 491-9181
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of November 3, 1994.
10,267,931 shares.
Exhibit Index Appears on Page 14
<PAGE>
IMPERIAL HOLLY CORPORATION
Index
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets ................. 3
Consolidated Statements of Income ........... 4
Consolidated Statements of Cash Flows ....... 5
Consolidated Statement of Changes in
Shareholders' Equity ........................ 6
Notes to Consolidated Financial Statements .. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ............. 12
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<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1994 March 31, 1994
(UNAUDITED)
--------------- --------------
ASSETS (In Thousands of Dollars)
CURRENT ASSETS:
Cash and temporary investments ........ $ 1,973 $ 555
Marketable securities ................. 30,137 28,334
Accounts receivable ................... 51,075 43,856
Inventories:
Finished products ................... 49,929 110,671
Raw and in-process materials ........ 21,409 22,370
Supplies ............................ 13,253 11,688
Manufacturing costs prior to production 23,275 13,573
Prepaid expenses ...................... 4,593 4,604
---------- ----------
Total current assets .............. 195,644 235,651
OTHER INVESTMENTS ....................... 6,365 6,553
PROPERTY, PLANT AND EQUIPMENT, NET ...... 138,300 141,234
OTHER ASSETS ............................ 10,064 10,222
---------- ----------
TOTAL .......................... $ 350,373 $ 393,660
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable -- trade ............. $ 54,169 $ 43,767
Short-term borrowings ................. 24,090 77,438
Current maturities of long-term debt .. 84 84
Other current liabilities ............. 32,282 30,318
---------- ----------
Total current liabilities ......... 110,625 151,607
LONG-TERM DEBT .......................... 100,019 100,044
DEFERRED TAXES AND OTHER CREDITS ........ 25,888 27,272
SHAREHOLDERS' EQUITY
Preferred stock ....................... -- --
Common stock .......................... 31,884 31,780
Retained earnings ..................... 78,897 79,862
Unrealized securities gains -- net .... 3,769 3,804
Pension liability adjustment .......... (709) (709)
---------- ----------
Total shareholders' equity .......... 113,841 114,737
---------- ----------
TOTAL .......................... $ 350,373 $ 393,660
========== ==========
See notes to consolidated financial statements.
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<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
---------------------------------- ----------------------------------
1994 1993 1994 1993
------------- ------------- ------------- -------------
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
NET SALES ...................................... $ 162,072 $ 164,808 $ 311,396 $ 332,887
------------- ------------- ------------- -------------
COSTS AND EXPENSES:
Cost of sales ................................ 148,116 152,484 282,567 302,887
Selling, general and administrative .......... 14,027 16,199 27,648 32,318
Cost of work force reduction ................. -- 925 -- 925
------------- ------------- ------------- -------------
Total ...................................... 162,143 169,608 310,215 336,130
------------- ------------- ------------- -------------
OPERATING INCOME (LOSS) ........................ (71) (4,800) 1,181 (3,243)
INTEREST EXPENSE ............................... (2,554) (2,841) (5,187) (5,600)
REALIZED SECURITIES GAINS -- NET ............... 116 8 1,738 462
OTHER INCOME -- NET ............................ 685 719 2,022 814
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES .............. (1,824) (6,914) (246) (7,567)
PROVISION (CREDIT) FOR INCOME TAXES ............ (684) (1,644) (102) (1,932)
------------- ------------- ------------- -------------
NET INCOME (LOSS) .............................. $ (1,140) $ (5,270) $ (144) $ (5,635)
============= ============= ============= =============
EARNINGS (LOSS) PER SHARE OF COMMON STOCK ...... $ (0.11) $ (0.52) $ (0.01) $ (0.55)
============= ============= ============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING ............ 10,262,336 10,203,839 10,259,350 10,203,784
============= ============= ============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Six Months Ended
September 30
------------------------
1994 1993
----------- -----------
(In Thousands of Dollars)
OPERATING ACTIVITIES:
Net income (loss) .................................. $ (144) $ (5,635)
Adjustments for non-cash and non-operating items:
Depreciation ..................................... 6,863 8,314
Gain on sales of securities ...................... (1,738) (462)
Gain on sales of fixed assets .................... (1,418) 1
Other ............................................ 281 1,475
Working capital changes:
Receivables ...................................... (7,219) 2,374
Advances on raw sugar purchase contract .......... -- (7,001)
Inventory ........................................ 59,486 14,654
Deferred and prepaid costs ....................... (9,691) (5,572)
Accounts payable ................................. 10,402 2,325
Other liabilities ................................ 595 (2,853)
--------- ---------
Operating cash flow ................................ 57,417 7,620
--------- ---------
INVESTMENT ACTIVITIES:
Capital expenditures ............................... (5,311) (5,951)
Investment in marketable securities ................ (3,901) (2,899)
Proceeds from sale of marketable securities ........ 3,766 4,417
Proceeds from sale of fixed assets ................. 2,800 12
Other .............................................. 101 (118)
--------- ---------
Investing cash flow .................................. (2,545) (4,539)
--------- ---------
FINANCING ACTIVITIES:
Short-term debt:
Bank borrowings - net ............................ (1,582) 42,157
CCC borrowings - advances ........................ 16,928 --
CCC borrowings - repayments ...................... (68,042) (50,077)
Repayment of long-term debt ........................ (25) (24)
Dividends paid ..................................... (821) (2,449)
Other .............................................. 88 7
--------- ---------
Financing cash flow .................................. (53,454) (10,386)
--------- ---------
INCREASE (DECREASE) IN CASH AND TEMPORARY INVESTMENTS 1,418 (7,305)
CASH AND TEMPORARY INVESTMENTS, BEGINNING OF PERIOD .. 555 9,405
--------- ---------
CASH AND TEMPORARY INVESTMENTS, END OF PERIOD ........ $ 1,973 $ 2,100
========= =========
See notes to consolidated financial statements.
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<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the Six Months Ended September 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Unrealized Pension
--------------------- Retained Securities Liability
Shares Amount Earnings Gains Adjustment Total
---------- -------- --------- -------- ---------- ---------
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1994 .............................. 10,252,959 $ 31,780 $79,862 $3,804 $(709) $114,737
Net income (loss) .................................... (144) (144)
Cash dividend ........................................ (821) (821)
Employee stock purchase plan ......................... 11,960 104 104
Change in unrealized securities gains - net .......... (35) (35)
---------- -------- ------- ------- ------ ---------
BALANCE, SEPTEMBER 30, 1994 .......................... 10,264,919 $ 31,884 $78,897 $3,769 $(709) $113,841
========== ======== ======= ======= ====== =========
</TABLE>
See notes to consolidated financial statements.
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IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
Basis of Presentation -- The unaudited condensed consolidated financial
statements included herein have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission and reflect, in the
opinion of management, all adjustments, consisting only of normal recurring
accruals, that are necessary for a fair presentation of financial position
and results of operations for the interim periods presented. These
financial statements include the accounts of Imperial Holly Corporation and
its majority owned subsidiaries (the "Company"). All significant
intercompany balances and transactions have been eliminated in
consolidation. Certain information and footnote disclosures required by
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The financial statements included
herein should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended March 31, 1994.
Cost of Sales -- Payments to growers for sugarbeets are based in part
upon the Company's average net return for sugar sold (as defined in the
participating contracts with growers) during the grower contract years,
some of which extend beyond September 30. The contracts provide for the
sharing of the net selling price (gross sales price less certain marketing
costs, including packaging costs, brokerage, freight expense and
amortization of costs for certain facilities used in connection with
marketing) with growers. Cost of sales includes an accrual for estimated
additional amounts to be paid to growers based on the average net return
realized for sugar sold during each of the contract years through September
30. The final cost of sugarbeets cannot be determined until the end of the
contract year for each growing area. Manufacturing costs prior to
production are deferred and allocated to production costs based on
estimated total units of production for each sugar manufacturing campaign.
Additionally, the Company's sugar inventories, which are accounted for on a
LIFO basis, are periodically reduced at interim dates to levels below that
of the beginning of the fiscal year. When such interim LIFO liquidations
are expected to be restored prior to fiscal year-end, the estimated
replacement cost of the liquidated layers is utilized as the basis of the
cost of sugar sold from beginning of the year inventory. Accordingly, the
cost of sugar utilized in the determination of cost of sales for interim
periods includes estimates which may require adjustment in future fiscal
periods.
Contingencies -- In 1992, the U.S. Customs Service ("Customs") notified
the Company that Customs had audited customs drawback claims filed by the
Company in 1985 and that Customs would require the Company to repay to
Customs certain duties and fees previously refunded to the Company. In
April 1992, the Company refunded $2.5 million to Customs under protest, a
condition precedent to the commencement of an appeal of the audit decision
and recorded such amount in other assets. The Company has reached a
tentative settlement
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with Customs, subject to final approval by the U.S. Department of the
Treasury, which would result in the Company collecting the amount
previously recorded.
The Company was notified by the Environmental Protection Agency ("EPA")
in July 1994 that it had been reclassified as a "de minimis" potentially
responsible party with respect to the Operating Industries, Inc. Superfund
site in Monterey, California. The EPA has indicated that fuel oil removed
from a former Holly Sugar Corporation factory was disposed of at the site
by a third party waste disposal contractor when the factory was closed in
1977, prior to the acquisition of Holly Sugar by the Company. According to
the EPA, approximately 300 potentially responsible parties have previously
agreed to perform portions of the cleanup work at the site and to pay the
costs for the oversight of this work. By law, as long as a party remains a
"de minimis" potentially responsible party, liability for clean up costs is
limited to no more than $500,000. Holly Sugar had third party insurance
coverage in force in 1977 which management believes may provide coverage
against losses which may be incurred. The Company has not been able to
determine its ultimate liability, if any, with respect to this matter.
- 8 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company finances its working capital and capital expenditure
requirements from a combination of funds generated by operations and
short-term borrowing arrangements, including short- term, secured,
non-recourse borrowings from the Commodity Credit Corporation ("CCC"). Net
selling prices of sugar have recently been below collateral rates on some
CCC loans. The Company chose to forfeit sugar in full satisfaction of a CCC
loan which matured August 31, 1994 in the amount of $652,000. No CCC loans
were outstanding at September 30, 1994.
The decrease in finished product inventory during the six months ended
September 30, 1994 was due in part to the seasonal production schedule of
the Company's beet sugar operations. Additionally, the Company's
Betteravia, California factory ceased sugarbeet processing in July 1993,
reducing fiscal 1995 production and contributing to the reduction in
refined sugar inventories. The increases in accounts payable result from
the timing of the purchase of and payments for raw sugar.
Operating cash flow of $57.4 million for the six months ended September
30, 1994 was used to reduce short-term debt. Long-term debt consists almost
entirely of $100 million principal amount of 8-3/8% senior notes due 1999,
which requires semi-annual interest- only payments prior to maturity.
Management believes that existing internal and external sources are
adequate to meet its financing requirements, including fiscal 1995 capital
expenditures, estimated at $8.5 million. The Company's marketable
securities portfolio is reported at its market value of $30.1 million at
September 30, 1994, $5.8 million in excess of its cost basis.
RESULTS OF OPERATIONS
Net sales declined $21.5 million or 6.5% for the six months ended
September 30, 1994 as compared to the same period of the prior year,
principally due to a 4.6% decrease in the volume of sugar sold as well as
reductions in beet pulp volumes. A reduction in favorable sales
opportunities in the cane sugar segment, as well as lower first quarter
beet sugar production owing to the Betteravia factory closure, were the
primary factors in the volume reductions. Average sales price of sugar
declined 1.2% from the already depressed levels of the year earlier period.
For the quarter ending September 30, 1994, net sales decreased $2.7 million
or 1.7% from the prior year mostly due to lower average sales price,
primarily resulting from a change in product mix.
On September 29, 1994, the USDA announced that marketing allotments
provided for in the current Farm Bill were being imposed on refined beet
sugar and raw cane sugar for the USDA fiscal year which commenced October
1, 1994. The Company is unable to predict whether the imposition of
marketing allotments will significantly impact future refined sugar prices
realized, raw
- 9 -
sugar prices or the Company's selling margins. Based on the announced
allotments and the Company's current production estimates, Management does
not believe that marketing allotments will materially restrict the
Company's beet sugar sales volumes or materially affect inventory levels.
Subsequent to the USDA's announcement, the Company and most of its
competitors announced price increases.
Cost of sales decreased $20.3 million or 6.7% during the six months
ended September 30, 1994 compared to the same period of the prior year
primarily due to the decreases in sales volumes. As a percent of sales,
cost of sales decreased from 91.0% to 90.7% for the six month periods. For
the second quarter, cost of sales decreased $4.4 million or 2.9% and
represented 91.4% of sales, down from 92.5% in the prior year's quarter.
Unit manufacturing costs of beet sugar declined 10.1% for the six months
and 15.1% for the second quarter of the fiscal year as a result of an
exceptional production campaign in the Company's Brawley factory and the
elimination of high cost production from the Betteravia factory, which was
closed in July 1993. Although absent adverse weather conditions, the
Company's beet sugar manufacturing costs historically have declined in the
second half of the fiscal year, reduced acreage in the Texas Panhandle for
the upcoming campaign will affect throughput and cost at the Company's
Hereford, Texas factory. The cost of raw cane sugar purchased in both the
three and six month periods increased approximately 3% from the prior year
and as a result, the Company experienced a decrease in its unit margins on
cane sugar sales. The Company purchases sugarbeets under participatory
contracts which provide for a percentage sharing of the net selling price
realized on refined beet sugar sales between the Company and the grower.
Use of this type of contract reduces the Company's exposure to inventory
price risks on sugarbeet purchases so long as the contract net selling
price does not fall below the regional minimum support prices established
by the USDA. Depressed refined sugar selling prices have resulted in net
selling prices falling below such minimum support levels in many contract
areas. Consequently, the decline in the unit selling price of refined beet
sugar was only partially offset by a decline in the unit cost of sugar
beets purchased.
Total selling, general and administrative expenses decreased by $4.7
million or 14.4% for the six months and $2.2 million or 13.4% for the three
months ended September 30, 1994 compared to the same periods of the prior
year, as decreases in warehousing and advertising cost were coupled with
reductions in general and administrative costs. The Company undertook a
cost reduction program, which included a work force reduction in the third
quarter of the prior fiscal year, with the majority of the cost reductions
reflected in selling, general and administrative expenses.
Interest expense for the six and three month periods ended September 30,
1994 was lower than the comparable period of the prior year as a result of
the repayment out of lower cost short- term borrowings of the remaining
$18.8 million principal amount of 10.93% senior notes in October 1993.
Higher average short- term interest rates and somewhat higher than average
balances partially offset these lower long-term interest costs. Other
income -- net includes a $1.4 million gain on the sale of a corporate
aircraft in May 1994.
- 10 -
The provision for income taxes for the quarter ended September 30, 1993,
includes a charge of $872,000 to adjust the Company's deferred tax
liabilities for the increase in corporate income tax rates enacted in
August 1993.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits required to be filed with this report are listed in the
Exhibit Index which immediately follows the signatures page of this report.
Registrant is a party to several long-term debt instruments under which
in each case the total amount of securities authorized does not exceed 10%
of the total assets of Registrant and its subsidiaries on a consolidated
basis. Pursuant to paragraph 4(iii) (A) of Item 601(b) of Regulation S-K,
Registrant agrees to furnish a copy of such instruments to the Securities
and Exchange Commission upon request.
(b) No reports on Form 8-K were filed during the quarter ended June 30,
1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMPERIAL HOLLY CORPORATION
(Registrant)
Dated: November 4, 1994 By: /s/ James C. Kempner
James C. Kempner
President,
Chief Executive Officer
and Chief Financial Officer
(Principal Financial Officer)
- 13 -
IMPERIAL HOLLY CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
Exhibit Index
Exhibit
10(a) Schedule of Employment Agreements
10(b)(1) Imperial Holly Corporation Salary Continuation Plan (As Amended
and Restated Effective August 1, 1994)
10(b)(2) Specimen of the Company's Salary Continuation Agreement (Fully
Vested)
10(b)(3) Specimen of the Company's Salary Continuation Agreement
(Graduated Vesting)
10(b)(4) Schedule of Salary Continuation Agreements 10(c)(1) Imperial
Holly Corporation Benefit Restoration Plan (As Amended and
Restated Effective August 1, 1994)
10(c)(2) Specimen of the Company's Benefit Restoration Agreement (Fully
Vested)
10(c)(3) Specimen of the Company's Benefit Restoration Agreement
(Graduated Vesting)
10(c)(4) Schedule of Benefit Restoration Agreements 10(d)(1) Specimen of
the Company's Change of Control Agreement 10(d)(2) Schedule of
Change of Control Agreements 11 Computation of Income Per Common
Share
27 Financial Data Schedule
- 14 -
Exhibit 10(a)
IMPERIAL HOLLY CORPORATION
SCHEDULE OF EMPLOYMENT AGREEMENTS
Name Title Expiration Date
________________ _____________________________ _________________
I. H. Kempner, III Chairman of the Board September 1,1997
J. C. Kempner President, Chief Executive Officer July 26, 1998
and Chief Financial Officer
R. W. Hill Executive Vice President July 26, 1998
H. J. Smith Executive Vice President, October 29, 1997
Sales and Marketing
W. F. Schwer Senior Vice President, Secretary July 26, 1998
and General Counsel
IMPERIAL HOLLY CORPORATION
SALARY CONTINUATION PLAN
(As Amended and Restated Effective August 1, 1994)
Imperial Holly Corporation, a Texas corporation (hereinafter
called the "Company"), hereby amends, restates and continues the Imperial
Holly Corporation Salary Continuation Plan, as amended and restated
August 1, 1990, in the form of the amended and restated Imperial Holly
Corporation Salary Continuation Plan, effective August 1, 1994, as follows:
I. PURPOSE AND DEFINITIONS
1.01 PURPOSE. The purpose of this Plan is to provide retirement,
death and disability benefits for selected salaried officers and other key
management employees of the Company.
1.02 DEFINITIONS.
(a) "Plan" means the Imperial Holly Corporation Salary
Continuation Plan, as amended and restated herein effective August 1, 1994,
as the same may hereafter be amended from time to time.
(b) "Company" means Imperial Holly Corporation (formerly known
as Imperial Sugar Company), a Texas corporation, or any successor and its
Affiliates.
(c) "Affiliate" means any corporation in which the shares owned
or controlled, directly or indirectly, by the Company represent eighty
(80%), or more, of the voting power of the issued and outstanding capital
stock of such corporation, and a corporation which owns or controls,
directly or indirectly, eighty percent (80%), or more, of the voting power
of the issued and outstanding capital stock of the Company, and any
corporation in which eighty percent
-1-
(80%), or more, of the voting power of the issued and outstanding capital
stock is owned or controlled, directly or indirectly, by any corporation
which owns or controls, directly or indirectly, eighty percent (80%), or
more, of the voting power of the issued and outstanding capital stock of
the Company.
(d) "Participant" means an Employee of the Company who is
selected by the Committee to participate in the Plan and who enters into a
Salary Continuation Agreement with the Company.
(e) "Board of Directors" means the Board of Directors of the
Company.
(f) "Employee" means any officer or other key management
employee of the Company (whether or not he is also a director thereof), who
is compensated for employment with the Company by a regular salary.
II. ADMINISTRATION
2.01 APPOINTMENT OF COMMITTEE. This Plan shall be administered
by the Executive Compensation Committee of the Board of Directors or such
other persons who shall be appointed by the Board of Directors (hereinafter
referred to as the "Committee"). The Committee shall represent the Company
in all matters concerning the administration of this Plan. The Board of
Directors by resolution adopted by the Board of Directors may remove a
Committee member for any reason, and the Board of Directors shall fill any
vacancies thus created.
2.02 NAMED FIDUCIARY. The Committee shall be the Named Fiduciary
of the Plan.
-2-
2.03 POWERS AND DUTIES. The Committee shall have the primary
responsibility for the administration and operation of the Plan and shall
have all powers necessary to carry out the provisions of the Plan,
including but not limited to the following:
(a) To determine all questions arising in the administration,
interpretation and application of the Plan.
(b) To determine the eligibility of each Employee for
participation in the Plan.
(c) To set down uniform and nondiscriminatory rules of
interpretation and administration which may be modified from time to time
in light of the Committee's experience.
(d) To publish and file or cause to be published and filed or
disclosed all reports and disclosures required by federal or state law.
2.04 RECORDS AND REPORTS. The Committee shall keep a record of
all its proceedings and acts, and shall keep all such books of account,
records and other data as may be necessary for the proper administration of
the Plan.
2.05 PAYMENT OF EXPENSES. The Committee shall serve without
compensation for its services but all expenses of the Committee shall be
paid by the Company.
2.06 INDEMNITY OF COMMITTEE. The Company shall indemnify each
member of the Committee against any and all claims, loss, damage, expense
or liability arising from any action or failure to act, except when the
same is determined to be due to the gross negligence or willful misconduct
of such Committee member.
2.07 AGENT FOR SERVICE OF PROCESS. The Committee shall be the
agent for service of legal process for the Plan. The business address and
telephone number of the Committee, as the Named Fiduciary and Plan
Administrator, is: c/o Imperial Holly Corporation, P.O. Box 9, Sugar Land,
Texas 77487-0009; telephone (713) 491-9181. The
-3-
Company shall have the right to change the Named Fiduciary of the Plan and
shall also have the right to change the address and telephone number of the
Named Fiduciary. The Company shall give each Participant under the Plan
written notice of any change of the Named Fiduciary or any change in the
address and telephone number of the Named Fiduciary.
III. PARTICIPATION IN THE PLAN
3.01 ELIGIBILITY. The Committee may from time to time establish
such eligibility requirements for participation in the Plan as it may deem
appropriate; provided, however, that only salaried officers and other key
management employees of the Company shall be eligible to participate in the
Plan.
3.02 SALARY CONTINUATION AGREEMENT. Each eligible Employee
chosen by the Committee to participate in the Plan shall be offered a
Salary Continuation Agreement setting forth the specific provisions which
the Committee has determined to be appropriate for such Employee. No
Employee shall have any rights whatsoever under the Plan other than the
rights and benefits granted to him under his Salary Continuation Agreement
with the Company. Any Employee may decline to participate in the Plan upon
executing a waiver in form as deemed sufficient by the Committee.
IV. SALARY CONTINUATION BENEFITS
4.01 SUPPLEMENTAL RETIREMENT BENEFITS. Each Salary Continuation
Agreement entered into under this Plan shall provide for a supplemental
retirement benefit for the Participant in such amount and subject to such
service requirements and other conditions as the Committee (in its sole
discretion) shall determine to be appropriate and shall set forth therein;
PROVIDED, HOWEVER, that such supplemental retirement benefit shall not
commence to be paid to
-4-
a Participant prior to the later of (i) the date the Participant attains
age 55 or (ii) the date such Participant terminates employment with the
Company and all Affiliates, except as otherwise provided in Sections 4.04
and 4.05.
4.02 SUPPLEMENTAL DEATH BENEFITS. Each Salary Continuation
Agreement may provide for a supplemental death benefit payable to the
surviving spouse or other beneficiary of the Participant in such amounts
and subject to such conditions as the Committee shall determine to be
appropriate and shall set forth therein.
4.03 SUPPLEMENTAL DISABILITY BENEFITS. Each Salary Continuation
Agreement may provide a supplemental disability benefit payable to the
Participant in the event of such Participant's Disability (as defined in
such Participant's Salary Continuation Agreement) in such amounts and
subject to such conditions as the Committee shall determine to be
appropriate and shall set forth therein.
4.04 CHANGE IN CONTROL BENEFITS. Each Salary Continuation
Agreement may provide for full vesting in and the immediate payment of the
full unreduced value of the supplemental retirement benefit under this Plan
in the event of a change in control of the Company and, subject to the
specific provisions of each Participant's Salary Continuation Agreement,
the termination of employment of the Participant with the Company and all
Affiliates. Each Salary Continuation Agreement may also provide for an
accelerated lump-sum payment of any supplemental disability payment in the
event of a change in control. For purposes of this Plan, a "change in
control" of the Company shall be deemed to have occurred if any of the
following shall have taken place: (a) a change in control is reported by
the Company in response to either Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") or Item 1 of Form 8-K promulgated
-5-
under the Exchange Act; (b) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty percent (40%)
or more of the combined voting power of the Company's then outstanding
securities; or (c) following the election or removal of directors, a
majority of the Board of Directors consists of individuals who were not
members of the Board of Directors two (2) years before such election or
removal, unless the election of each director who was not a director at the
beginning of such two-year period has been approved in advance by directors
representing at least a majority of the directors then in office who were
directors at the beginning of the two-year period.
Notwithstanding other provisions of this Section 4.04, the
aggregate present value of all parachute payments payable to or for the
benefit of a participant in the Plan, whether payable pursuant to this Plan
or otherwise, shall be limited to three (3) times the participant's base
amount less one dollar and, to the extent necessary, the acceleration of
vesting and payment of benefits under this Plan shall be reduced by the
Company in order that this limitation not be exceeded. For purposes of
this Section 4.04, the terms "parachute payment," "base amount" and
"present value" shall have the meanings assigned thereto under Section 280G
of the Internal Revenue Code of 1986 (the "Code"). It is the intention of
this Section 4.04 to avoid excise taxes on the participant under
Section 4999 of the Code or the disallowance of a deduction to the Company
pursuant to Section 280G of the Code.
4.05 EARLY COMMENCEMENT OF BENEFITS. Each Salary Continuation
Agreement may provide, at the discretion of the Committee, that a
Participant receive such Participant's supplemental retirement benefit
under this Plan prior to the date such Participant terminates
-6-
employment with the Company and all Affiliates; PROVIDED, HOWEVER, that the
Participant may not receive such supplemental retirement benefit under this
Plan prior to the later of (i) the date the Participant attains the age of
55 or (ii) the date such Participant becomes 100% vested in the
supplemental retirement benefit under this Plan.
4.06 WITHHOLDING OF TAXES. The Company shall deduct from the
amount of any benefits payable under a Salary Continuation Agreement
entered into under this Plan any taxes required to be withheld by the
federal or any state or local government.
V. RIGHTS OF PARTICIPANTS
5.01 LIMITATION OF RIGHTS. Nothing in this Plan shall be
construed to:
(a) Give any Employee of the Company or an Affiliate any right
to participate in the Plan;
(b) Limit in any way the rights of the Company or any Affiliate
to terminate a Participant's employment with the Company or any Affiliate
at any time;
(c) Give a Participant or any spouse or other beneficiary of a
deceased Participant any interest in any fund or in any specific asset or
assets of the Company or any Affiliate; or
(d) Be evidence of any agreement or understanding, express or
implied, that the Company or any Affiliate will employ a Participant in any
particular position or at any particular rate of remuneration.
5.02 NONALIENATION OF BENEFITS. No right or benefit under this
Plan shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber or charge the same will be void.
-7-
No right or benefit hereunder shall be in any manner payable for or subject
to any debts, contracts, liabilities or torts of the person entitled to
such benefits.
5.03 PREREQUISITES TO BENEFITS. No Participant, or any person
claiming through a Participant, shall have any right or interest in the
Plan, his Salary Continuation Agreement, or any benefits thereunder unless
and until all the terms, conditions and provisions of the Plan and the
Salary Continuation Agreement which affect such Participant or such other
person shall have been complied with.
VI. CLAIMS PROCEDURE
6.01 CLAIM. A Participant shall receive all of the benefits
under this Plan to which such Participant is entitled without making
specific application therefor. If, however, an Employee is not selected
for participation or a Participant or such Participant's beneficiary
(hereinafter referred to as a "Claimant") is denied all or any portion of
an expected Plan benefit for any reason, such Claimant may file a claim
with the Committee. The Committee shall notify the Claimant within sixty
(60) days of allowance or denial of the claim. The notice shall be in
writing, sent by mail to Claimant's last known address, and must contain
the following information:
(a) The specific reasons for the denial;
(b) Specific reference to pertinent Plan, Salary Continuation
Agreement or insurance contract provision on which the denial is based;
(c) If applicable, a description of any additional information
or material necessary to perfect the claim, and an explanation of why such
information or material is necessary; and an explanation of the claims
review procedure.
-8-
6.02 REVIEW PROCEDURE.
(a) A Claimant is entitled to request a review of any denial of
his claim by the Committee which is the Plan Administrator. The request
for review must be submitted in writing within sixty (60) days of mailing
of notice of the denial. Absent a request for review within the sixty-day
period, the claim will be deemed to be conclusively denied. The Claimant
or his representatives shall be entitled to review all pertinent documents,
and to submit issues and comments in writing.
(b) The Board of Directors shall review the claim and render the
final decision.
6.03 FINAL DECISION. Within sixty (60) days of mailing of a
request for review, the Board of Directors shall allow or deny the claim.
The decision shall be made in writing to the Claimant. The decision shall
recite the facts and reasons for denial, with specific reference to the
pertinent Plan provisions.
VII. MISCELLANEOUS
7.01 AMENDMENT AND TERMINATION OF THE PLAN. The Board of
Directors may amend or terminate this Plan at any time. Any such amendment
or termination shall not, however, affect the rights of any Participant to
the benefits provided under an executed Salary Continuation Agreement.
7.02 APPLICABLE LAWS. This Plan shall be construed, administered
and governed in all respects under the laws of the State of Texas.
7.03 NON-FUNDING OF BENEFITS. The benefits payable under this
Plan are unfunded and unsecured promises to pay of the Company. A life
insurance or annuity contract
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(hereinafter referred to as a "Contract") on the life of each Participant
may be applied for by the Company or by the Trustee of an Executive
Benefits Trust established by the Company. Such Contract, if purchased,
shall be the sole, unrestricted property of the Company or such Trust. The
amounts of compensation deferred pursuant to this Plan and any Contract
purchased hereunder shall at all times be subject to the claims of the
Company's creditors.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its duly authorized officers this 29th day of September,
1994, but effective August 1, 1994.
IMPERIAL HOLLY CORPORATION
By JAMES C. KEMPNER
James C. Kempner
President & Chief Executive Officer
ATTEST:
W. F. SCHWER
W. F. Schwer
Secretary
[SEAL]
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Exhibit 10(b)(2)
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT (this "Agreement"), made as of the _____ day of , 199_, by
and between IMPERIAL HOLLY CORPORATION, a Texas corporation (the "Company"),
_________________________ and ("Employee");
W I T N E S S E T H:
WHEREAS, the Company has established a Salary Continuation Plan,
effective April 1, 1981, as amended and restated effective August 1, 1990,
and as amended thereafter (the "Plan"), to provide supplemental retirement,
death and disability benefits for certain of its officers and key
managerial employees who are selected by the Executive Compensation
Committee of the Company's Board of Directors (the "Committee") to
participate in the Plan, pursuant to which individual salary continuation
agreements have been entered into with the officers and other key
managerial employees to whom coverage under the Plan has been extended; and
WHEREAS, the Committee has selected Employee to participate in the
Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:
1. REFERENCE TO PLAN. This Agreement is being entered into in
accordance with and subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are still in effect on the date
hereof. Employee has received a copy of, and is familiar with the terms of,
the Plan and any such administrative interpretations, which are hereby
incorporated herein by reference.
2. SALARY CONTINUATION AFTER NORMAL RETIREMENT. If Employee terminates
employment with the Company on or after the date Employee attains the age
of sixty-five (65) ("Normal Retirement"), the Company shall pay a
supplemental retirement benefit as a lump sum cash payment to Employee in
the amount of $ (the "Retirement Benefit") on Employee's Normal Retirement
Date (as hereinafter defined). For purposes of this Agreement, the term
"Normal Retirement Date" shall mean the later of the first day of the month
coincident with or next following the date Employee attains the age of
sixty-five (65) or the first day of the month next following the date
Employee terminates employment with the Company.
3. EARLY RETIREMENT. If Employee terminates employment with the
Company prior to Employee's Normal Retirement but after the date Employee
attains the age of sixty-two (62), the Company shall pay a supplemental
early retirement benefit as a lump-sum cash payment to Employee in the
amount of $ (the "Early Retirement Benefit"). Such Early Retirement Benefit
shall be payable on the first day of the month next following the date
Employee terminates employment with the Company. If Employee terminates
employment with the Company after the date Employee attains the age of
fifty-five (55) but before the date Employee attains the age of sixty-two
(62) ("Early Retirement"), the Company shall pay to Employee, on the first
day of the month next following the date of Employee's Early Retirement, an
amount equal to Employee's Early Retirement Benefit, discounted by three
percent (3%) for each year (including fractional years thereof) by which
the date of such payment precedes the first day of the month coincident
with or next following the date Employee would attain the age of sixty-two
(62).
4. TERMINATION OF EMPLOYMENT DUE TO DISABILITY. If Employee terminates
employment with the Company because of Disability (as hereinafter defined)
prior to Employee's Normal Retirement, Employee shall be entitled to a
monthly supplemental disability benefit in the amount of $ (the "Disability
Benefit"), reduced by any disability income payable to Employee under any
individual disability policy for which premiums are paid by the Company.
Payments of the Disability Benefit, if any, shall commence on the first day
of the month next following the date of Employee's termination of
employment due to Disability and shall continue monthly thereafter until
the earliest of (i) the cessation of Employee's Disability, (ii) Employee's
death or (iii) Employee's Normal Retirement Date. If Employee's Disability
continues uninterrupted until Employee's Normal Retirement Date, Employee
shall receive the Retirement Benefit on Employee's Normal Retirement Date.
Subject to Paragraph 16 hereof, if Employee's Disability ceases before
Employee's Normal Retirement Date and Employee is immediately reemployed by
the Company, Employee's Disability Benefit provided under this Paragraph
shall immediately cease, and the Retirement Benefit, Early Retirement
Benefit, Termination Benefit (as defined in Paragraph 6B hereof), Unreduced
Termination Benefit (as defined in Paragraph 6B hereof) or Death Benefit
(as defined in Paragraph 5 hereof), whichever is applicable, payable upon
Employee's subsequent retirement or other termination of employment shall
be determined in accordance with the provisions of this Agreement. If
Employee's Disability ceases before Employee's Normal Retirement Date and
Employee is not immediately reemployed by the Company, then Employee, for
purposes of this Agreement, shall be deemed to have terminated employment
on the date Employee's Disability ceases for purposes of determining
Employee's eligibility to receive any other benefits under this Agreement.
For purposes of this Agreement, the term "Disability" means a physical or
mental disability which is determined by the Committee, upon the advice of
competent physicians of the Committee's selection, to prevent Employee from
engaging in any substantial gainful activity and which can be expected to
result in death or to be of long, continued and indefinite duration. The
total and irrecoverable loss of the sight of both eyes or the use of both
hands, or of both feet, or of one hand and one foot will be considered to
constitute Disability in all events. For purposes of this Agreement, the
Committee shall determine, upon the advice of competent physicians of the
Committee's selection, the date upon which Employee's Disability ceases.
5. DEATH OF EMPLOYEE WHILE IN EMPLOYMENT OR DURING DISABILITY. If
Employee dies while in employment with the Company or during Disability,
Employee's Beneficiary (as defined in Paragraph 15) shall be entitled to a
supplemental death benefit as a lump-sum cash payment in the amount of $
(the "Death Benefit"), payable on the first day of the month next following
the date of Employee's death. The Death Benefit shall be paid to Employee's
Beneficiary in lieu of any other benefits due Employee or Employee's
Beneficiary under this Agreement. The Death Benefit shall be reduced by the
amount of any prior payments by the Company to Employee, if any, for
benefits, other than Disability Benefits, under this Agreement.
6. TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT FOR REASONS OTHER
THAN DEATH OR DISABILITY.
A. TERMINATION FOR CAUSE. If Employee's employment with the Company is
terminated by the Company for Cause, as hereinafter defined, Employee shall
be entitled to receive no benefits under this Agreement. For purposes of
this Agreement, termination by the Company for "Cause" shall arise only if
the termination by the Company is based on (a) an act or acts of dishonesty
on the part of Employee constituting a felony which adversely affects the
Company, (b) a breach by Employee of Employee's agreement not to compete
with the Company described in Paragraph 14 below, and such breach results
in a demonstrable material injury to the Company, or (c) a gross and
deliberate disregard by Employee of Employee's duties and responsibilities
as an officer or employee of the Company. In the event of a termination of
Employee's employment by the Company for Cause, the Board of Directors of
the Company shall provide Employee with written notice of the conduct on
which the termination for Cause is based.
B. TERMINATION WITHOUT CAUSE. If Employee's employment with the
Company terminates prior to Employee's Early Retirement for any reason
other than death, Disability, or termination for Cause (whether said
termination of employment is by act of Employee or the Company), Employee
shall be entitled to a supplemental termination benefit as a lump-sum cash
payment (the "Termination Benefit") in an amount equal to the actuarial
equivalent (as hereinafter defined) of $ (the "Unreduced Termination
Benefit"), discounted from the date Employee would attain the age of
sixty-five (65) to the date of Employee's termination of employment. The
Termination Benefit shall be paid to Employee on the first day of the month
next following the later of (i) the date Employee attains the age of
fifty-five (55) or (ii) the date Employee terminates employment with the
Company. For purposes of this Paragraph, the term "actuarial equivalent"
shall have the same meaning as the term "Actuarially Equivalent", as
defined in the Imperial Holly Corporation Retirement Plan at the time such
Termination Benefit is paid to Employee. If Employee dies before the
payment of the Termination Benefit but after Employee's termination of
employment, Employee's Beneficiary shall be entitled to receive Employee's
Termination Benefit (i) on the first day of the month next following the
month in which Employee would have attained the age of fifty-five (55), had
Employee survived until such time and (ii) in the same amount as Employee
would have received on such date.
7. EARLY COMMENCEMENT OF EARLY RETIREMENT BENEFIT. Notwithstanding
anything in this Agreement to the contrary, in the sole discretion of the
Committee, Employee can receive Employee's Early Retirement Benefit prior
to Employee's termination of employment with the Company; PROVIDED,
HOWEVER, that such Early Retirement Benefit shall be paid no earlier than
the first day of the month next following the month in which Employee
attains the age of fifty-five (55). The Early Retirement Benefit payable
under this Paragraph shall be calculated in accordance with Paragraph 3, as
though Employee had terminated employment as of the last day of the month
prior to the payment date determined by the Committee. If Employee receives
an Early Retirement Benefit under this Paragraph, Employee shall be
entitled to no further benefits under this Agreement other than Disability
Benefits to which Employee may become entitled.
8. ADJUSTMENTS TO BENEFITS. Except as provided in Paragraph 9, to the
extent that any lump-sum payment under this Agreement would not be fully
deductible by the Company at the time of its payment by virtue of the
limitation contained in Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), such lump-sum payment shall instead be made
in annual installments. The amount of each annual installment shall be
equal to the lesser of (a) the full amount of the lump-sum payment, less
the amount of any annual installments previously made under this Paragraph,
or (b) the portion of such lump-sum payment which would be deductible by
the Company at the time it is paid. Each such annual installment shall be
paid on the last day of the calendar year or such other date as the
Committee shall determine.
9. CHANGE IN CONTROL. A "Change in Control" of the Company shall be
deemed to have occurred if any of the following shall have taken place: (a)
a change in control is reported by the Company in response to either Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") or Item 1 of Form 8-K promulgated
under the Exchange Act; (b) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty percent (40%)
or more of the combined voting power of the Company's then-outstanding
securities; or (c) following the election or removal of directors, a
majority of the Board of Directors consists of individuals who were not
members of the Board of Directors two (2) years before such election or
removal, unless the election of each director who is not a director at the
beginning of such two-year period has been approved in advance by directors
representing at least a majority of the directors then in office who were
directors at the beginning of the two-year period. Any payments due under
Subparagraph A or C shall be made as soon as practicable following a Change
in Control, but in no event later than thirty (30) days after the date of
such Change in Control. Any payments due under Subparagraph B or D shall be
made as soon as practicable following the date Employee terminates
employment with the Company, but in no event later than thirty (30) days
after the date Employee terminates employment with the Company.
A. DISABILITY AT CHANGE IN CONTROL. In the event of a Change in
Control, if Employee is then receiving a Disability Benefit, Employee shall
receive, in lieu of further Disability Benefits, a lump-sum cash payment
equal to the greater of (1) zero and (2) the present value, discounted at
5.5% without mortality assumptions, of the stream of Disability Benefit
payments that would otherwise have been due Employee until Employee's
Normal Retirement Date (assuming, for purposes of this calculation,
Employee's Disability would continue until Employee's Normal Retirement
Date), less the present value, discounted at 5.5% without mortality
assumptions, of the stream of payments, if any, Employee would receive
until Employee's Normal Retirement Date from any individual disability
policy for which premiums are paid by the Company (assuming, for purposes
of this calculation, that such payments would continue until Employee's
Normal Retirement Date). In the event of a Change in Control, if Employee
is suffering a Disability, Employee shall also receive the full unreduced
value of the Retirement Benefit, in lieu of all benefits, other than the
aforementioned lump-sum Disability Benefit, otherwise payable under this
Agreement.
B. DISABILITY AFTER CHANGE IN CONTROL. If Employee suffers a
Disability after a Change in Control, Employee shall receive, in lieu of
Employee's Disability Benefit, a lump-sum cash payment, equal to the
greater of (1) zero and (2) the present value, discounted at 5.5% without
mortality assumptions, of the stream of Disability Benefit payments that
would otherwise have been due Employee until Employee's Normal Retirement
Date (assuming, for purposes of this, Employee's Disability or Death
Benefit until Employee's Normal Retirement Date), less the present value,
discounted at 5.5% without mortality assumptions, of the stream of
payments, if any, Employee would receive until Employee's Normal Retirement
Date from any individual disability policy for which premiums are paid by
the Company (assuming, for purposes of this calculation, that such payments
would continue until Employee's Normal Retirement Date). In the event of
Employee's Disability after a Change in Control, Employee shall also
receive the full unreduced value of the Retirement Benefit, in lieu of all
benefits, other than the aforementioned lump-sum Disability Benefit,
otherwise payable under this Agreement.
C. TERMINATED VESTED EMPLOYEE. If Employee (i) has terminated
employment with the Company prior to a Change in Control, (ii) at the time
of such Change in Control, is not receiving a Disability Benefit, and (iii)
Employee or Employee's Beneficiary, as the case may be, has not received
any benefits, other than Disability Benefits, to which Employee is entitled
under this Agreement, then Employee or Employee's Beneficiary, as the case
may be, shall receive, in lieu of all such benefits, including Disability
Benefits, the present value of the Retirement Benefit, Early Retirement
Benefit, Unreduced Termination Benefit or Death Benefit to which Employee
or Employee's Beneficiary, as the case may be, is entitled, discounted to
the date of payment at 5.5% without mortality assumptions (1) from the date
Employee would have attained the age of sixty-two (62) if Employee has
terminated employment and (2) from the date Employee would have attained
the age of fifty-five (55) if Employee is deceased.
D. TERMINATION AFTER CHANGE IN CONTROL. If Employee's termination of
employment with the Company occurs after a Change in Control for reasons
other than Employee's Disability, Employee shall be paid the full unreduced
value of the Retirement Benefit, in lieu of all benefits, including
Disability Benefits, otherwise payable under this Agreement. Such payment
will be made regardless of (1) the length of time that has elapsed between
the date of the Change in Control and the date of Employee's termination of
employment and (2) whether Employee's termination of employment was
voluntary or involuntary.
E. PARACHUTE PAYMENT. Notwithstanding any provision hereof, to the
contrary, the aggregate present value of all parachute payments payable to
or for the benefit of Employee under this Agreement and under other plans
or agreements shall be one dollar ($1.00) less than three (3) times
Employee's base amount, and, to the extent necessary, payments under this
Agreement shall be reduced in order that this limitation not be exceeded.
The terms "parachute payment," "base amount" and "present value" shall have
the meanings assigned thereto under Section 280G of the Code. It is the
intention of this provision to avoid excise taxes on Employee under Section
4999 of the Code or the disallowance of a deduction to the Company pursuant
to Section 280G of the Code.
10. STATUS OF AGREEMENT. The benefits payable under this Agreement
shall be independent of, and in addition to, any other agreement relating
to Employee's employment that may exist from time to time between the
parties hereto, or any other compensation payable by the Company to
Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto,
nor shall any provision hereof, except as expressly stated, restrict the
right of the Company to discharge Employee or restrict the right of
Employee to terminate Employee's employment.
11. LIFE INSURANCE AND FUNDING. All amounts paid under this Agreement
shall be paid in cash from the general assets of the Company or from an
Executive Benefits Trust established by the Company to assume some or all
of the obligations of the Company hereunder. Benefits payable by the
Company may be reflected on the accounting records of the Company but
Employee shall not have any right, title, or interest whatsoever in or to
any investment reserves or accounts that the Company may establish or
accumulate to aid in providing the benefits described in this Agreement.
The Company in its sole discretion may apply for and procure as owner and
for its own benefit insurance on the life of Employee, in such amounts and
in such forms as the Company may choose. The trustee on behalf of the
Executive Benefits Trust may also hold as owner insurance on the life of
Employee. Employee shall have no interest whatsoever in any such policy or
policies, but at the request of the Company, Employee shall submit to
medical examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom the
Company or the trustee of the Executive Benefits Trust has applied for
insurance. The rights of Employee or Employee's Beneficiary, or estate, to
benefits under this Agreement shall be solely those of an unsecured
creditor of the Company.
12. SALE OF THE COMPANY. The sale of all or substantially all of the
property and assets of the Company other than in the usual and regular
course of its business, or a merger of the Company wherein the Company is
not the "surviving corporation," or any other transaction which in effect
amounts to the sale of the Company, shall not serve to terminate this
Agreement.
13. COMPANY DEFINED. For purposes of this Agreement, the term
"Company" shall also include any corporation which is an "Affiliate" as
defined in Section 1.02(c) of the Plan. Neither the transfer of Employee
from employment by the Company to employment by an Affiliate nor the
transfer of Employee from employment by an Affiliate to employment by the
Company shall be deemed a termination of employment of Employee by the
Company or by an Affiliate.
Further, the employment of Employee shall not be deemed to have been
terminated or interrupted because of Employee's absence from active
employment on account of temporary illness or during authorized vacation or
during temporary leaves of absence granted by the Company for reasons of
professional advancement, education, health or government service, or
during military leave for any period if Employee returns to active
employment within ninety (90) days after the termination of Employee's
military leave, or during any period required to be treated as a leave of
absence by virtue of any valid law or agreement.
14. FORFEITURE OF SALARY CONTINUATION PAYMENTS BY COMPETITION.
Employee agrees that, in consideration of the benefits provided herein,
Employee will not without the consent of the Company enter into competition
with the Company. For purposes of this Paragraph, Employee shall be deemed
to be in competition if Employee directly or indirectly, whether as
consultant, agent, officer, director, employee or otherwise, enters into an
association with another business enterprise which then is one of the
competitors of the Company respecting one or more of the Company's business
activities. The parties agree that one of the essential considerations for
the benefits provided Employee hereunder is to protect and preserve the
goodwill of the Company and its respective enterprises, and that said
goodwill will be substantially diminished in value if Employee were to
enter into competition with the Company before or within one year after
receiving any benefits under this Agreement.
In the event Employee is deemed to be in competition contrary to the
provisions of this Paragraph, thereupon Employee shall forfeit all rights
to any further payments of benefits under this Agreement and shall be
obligated to repay the Company all benefit payments, except Disability
Benefits, previously received under this Agreement.
In the event of a Change in Control, Employee's obligations under this
Paragraph shall expire and be canceled, and Employee shall be entitled to
the benefits provided under this Agreement in accordance with the terms of
this Agreement, notwithstanding whether Employee thereafter engages in
competition described in this Paragraph.
15. BENEFICIARY AND ALTERNATIVE BENEFICIARY. If Employee dies prior to
the receipt of benefits to which Employee is due pursuant to this
Agreement, such benefits shall be paid in accordance with Paragraph 2, 3, 5
or 6 above at the time therein specified to such person or persons, or the
survivor thereof, including corporations, unincorporated associations or
trusts, as Employee may have designated by written document delivered to
the Committee and referring to this Agreement (the "Beneficiary"). Employee
may from time to time revoke or change any such designation by written
document delivered to the Committee. If any designation of a Beneficiary or
revocation or change of a designation of a Beneficiary would have the
effect of disposing of the community property interest in payments
hereunder of Employee's spouse, the Company has no obligation to honor any
such designation of a Beneficiary or revocation or change in designation of
a Beneficiary absent the written consent of Employee's spouse. If there is
no valid designation of a Beneficiary on file with the Committee at the
time of Employee's death, or if the Beneficiary shall have predeceased
Employee or otherwise cease to exist, such distribution shall be made to
Employee's spouse, if living, otherwise to Employee's estate. If the
Beneficiary shall survive Employee but die before receiving the payment of
the benefit hereunder, such benefit shall be paid to such Beneficiary's
estate.
16. BENEFITS AFTER REEMPLOYMENT. If Employee terminates employment
with the Company and is subsequently re-employed by the Company, then upon
Employee's subsequent termination of employment Employee shall receive a
benefit determined under Paragraph 2, 3, 4, 5, 6 or 7 (whichever is
applicable) but reduced by the amount of any payment (except payments of
Disability Benefits), if any, which Employee received prior to Employee's
subsequent termination.
17. WITHHOLDING OF TAXES. The Company may deduct from the amount of
any payment hereunder any taxes required to be withheld by the federal or
any state or local government.
18. PROHIBITION AGAINST ASSIGNMENT. The Employee's right to benefits
under this Agreement shall not be assigned, transferred, pledged or
encumbered in any way, and any attempted assignment, transfer, pledge,
encumbrance or other disposition of such benefits shall be null and void
and without effect; PROVIDED, HOWEVER, that the Company may assign this
entire Agreement to any successor to all or substantially all of the
Company's capital stock or business and assets and this Agreement shall be
binding on any such successor.
19. BINDING EFFECT. This Agreement shall be binding on and after a
benefit of the Company, its successors and assigns, and Employee,
Employee's heirs, executors, administrators and legal representatives. As
used in this Agreement, the term "successor" shall include any person,
firm, corporation or other business entity which at any time, whether by
merger, purchase or otherwise, acquires all or substantially all of the
assets or business of the Company.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof, and may be modified only by a written instrument executed by both
parties hereto.
21. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
22. FACILITY OF PAYMENT. When Employee or Employee's Beneficiary
(either of which shall be referred to as the "Recipient") is incapacitated
in the judgment of the Committee by reason of physical or mental illness or
infirmity, the Company may make any payments required by this Agreement:
(a) to the Recipient directly; (b) to the guardian of the Recipient's
personal estate; (c) to the custodian of a minor Recipient serving under
the Uniform Gifts to Minors Act of Texas or any other state; or (d) in the
event an inter vivos or testamentary trust is then in existence for the
benefit of any such Recipient, the Company may make any such payments to
the trustee or trustees of any such trust. The Company may make the payment
specified by this Agreement without liability to anyone other than the
specified payee. Employee hereby agrees, on behalf of Employee, Employee's
heirs and assigns, to hold the Company harmless from any liability for
making payments as specified by this Agreement; PROVIDED, HOWEVER, that the
Company shall not be held harmless for payments by the Company which are
made subsequent to the Company's receipt of a citation or other process
issuing out of a court of competent jurisdiction in connection with a suit
instituted by someone for the purpose of recovering or establishing an
interest in such payments.
23. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, in whole or in part, such invalidity shall not affect any
other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full
force and effect. If this Agreement or any portion thereof conflicts with
law or regulation governing the activities of the Company, the Agreement or
appropriate portion thereof shall be deemed invalid and of no force or
effect.
24. CONSENT OF SPOUSE. Employee's spouse is fully aware, understands,
and fully consents and agrees to the provisions of this Agreement and the
Agreement's binding effect upon any community property interest in payments
hereunder, and such awareness, understanding, consent and agreement is
evidenced by such spouse's signing of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement (in
multiple copies) on the day and year first above written.
IMPERIAL HOLLY CORPORATION
By __________________________________
James C. Kempner
President and Chief Executive Officer
ATTEST:
- --------------------------------
Secretary
[SEAL]
--------------------------------
Employee
--------------------------------
Employee's Spouse
Exhibit 10(b)(3
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT (this "Agreement"), made as of the ___ day of
____________, 1994, by and between IMPERIAL HOLLY CORPORATION, a Texas
corporation (the "Company"), and
____________________________________________ ("Employee");
W I T N E S S E T H:
WHEREAS, the Company has established a Salary Continuation Plan,
effective April 1, 1981, as amended and restated effective August 1, 1990,
and as amended thereafter (the "Plan"), to provide supplemental retirement,
death and disability benefits for certain of its officers and key
managerial employees who are selected by the Executive Compensation
Committee of the Company's Board of Directors (the "Committee") to
participate in the Plan pursuant to which individual salary continuation
agreements have been entered into with the officers and other key
managerial employees to whom coverage under the Plan has been extended; and
WHEREAS, the Committee has selected Employee to participate in the
Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:
1. REFERENCE TO PLAN. This Agreement is being entered into in
accordance with and subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations hereunder, if any, which
have been adopted by the Committee and are still in effect on the date
hereof. Employee has received a copy of, and is familiar with the terms of,
the Plan and any such administrative interpretations, which are hereby
incorporated herein by reference.
2. SALARY CONTINUATION AFTER NORMAL RETIREMENT. If Employee terminates
employment with the Company on or after the date Employee attains the age
of sixty-five (65) ("Normal Retirement"), the Company shall pay a
supplemental retirement benefit as a lump sum cash payment to Employee in
the amount of $ (the "Retirement Benefit") on Employee's Normal Retirement
Date (as hereinafter defined). For purposes of this Agreement, the term
"Normal Retirement Date" shall mean the later of the first day of the month
coincident with or next following the date Employee attains the age of
sixty-five (65) or the first day of the month next following the date
Employee terminates employment with the Company.
3. EARLY RETIREMENT. If Employee terminates employment with the
Company prior to Employee's Normal Retirement but after the date Employee
attains the age of sixty-two (62) and completes ten (10) Years of Service
(as defined in Paragraph 6B hereof), the Company shall pay a supplemental
early retirement benefit as a lump-sum cash payment to Employee in the
amount of $ (the "Early Retirement Benefit"). Such Early Retirement Benefit
shall be payable on the first day of the month next following the date
Employee terminates employment with the Company. If Employee terminates
employment with the Company after the date Employee attains the age of
fifty-five (55) but before the date Employee attains the age of sixty-two
(62) and after Employee completes ten (10) Years of Service ("Early
Retirement"), the Company shall pay to Employee, on the first day of the
month next following the date of Employee's Early Retirement, an amount
equal to Employee's Early Retirement Benefit, discounted by three percent
(3%) for each year (including fractional years thereof) by which the date
of such payment precedes the first day of the month coincident with or next
following the date Employee would attain the age of sixty-two (62).
4. TERMINATION OF EMPLOYMENT DUE TO DISABILITY. If Employee terminates
employment with the Company because of Disability (as hereinafter defined)
prior to Employee's Normal Retirement, Employee shall be entitled to
receive salary continuation payments in the monthly sum of that amount of
disability income that would be payable under any disability income payable
to Employee under any individual disability policy for which premiums are
paid by the Company. Payments of the Disability Benefit, if any, shall
commence on the first day of the month next following the date of
Employee's termination of employment due to Disability and shall continue
monthly thereafter until the earliest of (i) the cessation of Employee's
Disability, (ii) Employee's death or (iii) Employee's Normal Retirement
Date. If Employee's Disability continues uninterrupted until Employee's
Normal Retirement Date, Employee shall receive the Retirement Benefit on
Employee's Normal Retirement Date. Subject to Paragraph 16 hereof, if
Employee's Disability ceases before Employee's Normal Retirement Date and
Employee is immediately reemployed by the Company, Employee's Disability
Benefit provided under this Paragraph shall immediately cease, and the
Retirement Benefit, Early Retirement Benefit, Termination Benefit (as
defined in Paragraph 6B hereof), Unreduced Termination Benefit (as defined
in Paragraph 6B hereof) or Death Benefit (as defined in Paragraph 5
hereof), whichever is applicable, payable upon Employee's subsequent
retirement or other termination of employment shall be determined in
accordance with the provisions of this Agreement. If Employee's Disability
ceases before Employee's Normal Retirement Date and Employee is not
immediately reemployed by the Company, then Employee, for purposes of this
Agreement, shall be deemed to have terminated employment on the date
Employee's Disability ceases for purposes of determining Employee's
eligibility to receive any other benefits under this Agreement. For
purposes of this Agreement, the term "Disability" means a physical or
mental disability which is determined by the Committee, upon the advice of
competent physicians of the Committee's selection, to prevent Employee from
engaging in any substantial gainful activity and which can be expected to
result in death or to be of long, continued and indefinite duration. The
total and irrecoverable loss of the sight of both eyes or the use of both
hands, or of both feet, or of one hand and one foot will be considered to
constitute Disability in all events. For purposes of this Agreement, the
Committee shall determine, upon the advice of competent physicians of the
Company's selection, the date upon which Employee's Disability ceases.
5. DEATH OF EMPLOYEE WHILE IN EMPLOYMENT OR DURING DISABILITY. If
Employee dies while in employment with the Company or during Disability,
Employee's Beneficiary (as defined in Paragraph 15) shall be entitled to a
supplemental death benefit as a lump-sum cash payment in the amount of $
(the "Death Benefit"), payable on the first day of the month next following
the date of Employee's death. The Death Benefit shall be paid to Employee's
Beneficiary in lieu of any other benefits due Employee or Employee's
Beneficiary under this Agreement. The Death Benefit shall be reduced by the
amount of any prior payments by the Company to Employee, if any, for
benefits, other than Disability Benefits, under this Agreement.
6. TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT FOR REASONS OTHER
THAN DEATH OR DISABILITY.
A. TERMINATION FOR CAUSE. If Employee's employment with the Company is
terminated by the Company for Cause, as hereinafter defined, Employee shall
be entitled to receive no benefits under this Agreement. For purposes of
this Agreement, termination by the Company for "Cause" shall arise only if
the termination by the Company is based on (a) an act or acts of dishonesty
on the part of Employee constituting a felony which adversely affects the
Company, (b) breach by Employee of Employee's agreement not to compete with
the Company described in Paragraph 14 below, and such breach results in a
demonstrable material injury to the Company, or (a) a gross and deliberate
disregard by Employee of Employee's duties and responsibilities as an
officer or employee of the Company. In the event of a termination of
Employee's employment by the Company for Cause, the Board of Directors of
the Company shall provide Employee with written notice of the conduct on
which the termination for Cause is based.
B. TERMINATION WITHOUT CAUSE. If Employee's employment with the
Company terminates prior to Employee's Early Retirement for any reason
other than death, Disability, or termination for Cause (whether said
termination of employment is by act of Employee or the Company), Employee
shall be entitled to a supplemental termination benefit as a lump-sum cash
payment (the "Termination Benefit") in an amount equal to the actuarial
equivalent (as hereinafter defined) of the product of (a) multiplied by (b)
(the "Unreduced Termination Benefit"), where (a) is $ , discounted from the
date Employee would attain the age of sixty-five (65) to the date of
Employee's termination of employment, and where (b) is the applicable
percentage determined from the vesting schedule set forth below as follows:
YEARS OF SERVICE AT APPLICABLE
TERMINATION OF EMPLOYMENT PERCENTAGE
Less than 4 years 0%
4 years but less than 5 15%
5 years but less than 6 30%
6 years but less than 7 45%
7 years but less than 8 60%
8 years but less than 9 75%
9 years but less than 10 90%
10 years or more 100%
For purposes of the above vesting schedule, a "Year of Service" shall
mean each twelve consecutive completed calendar months of continuous
employment (including periods of Disability and authorized leaves of
absence as described in this Agreement) of Employee with the Company from
and after date. The Termination Benefit shall be paid to Employee on the
first day of the month next following the later of (i) the date Employee
attains the age of fifty-five (55) or (ii) the date Employee terminates
employment with the Company. For purposes of this Paragraph, the term
"actuarial equivalent" shall have the same meaning as the term "Actuarially
Equivalent", as defined in the Imperial Holly Corporation Retirement Plan
at the time such Termination Benefit is paid to Employee. If Employee dies
before the payment of the Termination Benefit but after Employee's
termination of employment with a vested benefit hereunder, Employee's
Beneficiary shall be entitled to receive Employee's Termination Benefit (i)
on the first day of the month next following the month in which Employee
would have attained the age of fifty-five (55), had Employee survived until
such time and (ii) in the same amount as Employee would have received on
such date.
7. EARLY COMMENCEMENT OF BENEFIT. Notwithstanding anything in this
Agreement to the contrary, in the sole discretion of the Committee,
Employee can receive Employee's Early Retirement Benefit prior to
Employee's termination of employment with the Company; PROVIDED, HOWEVER,
that such Early Retirement Benefit shall be paid no earlier than the first
day of the month next following the later of (i) the month in which
Employee attains the age of fifty-five (55) or (ii) the month in which
Employee completes ten (10) Years of Service. The Early Retirement Benefit
payable under this Paragraph shall be calculated in accordance with
Paragraph 3, as though Employee had terminated employment as of the last
day of the month prior to the payment date determined by the Committee. If
Employee receives an Early Retirement Benefit under this Paragraph,
Employee shall be entitled to no further benefits under this Agreement
other than Disability Benefits to which Employee may become entitled.
8. ADJUSTMENTS TO BENEFITS. Except as provided in Paragraph 9, to the
extent that any lump-sum payment under this Agreement would not be fully
deductible by the Company at the time of its payment by virtue of the
limitation contained in Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), such lump-sum payment shall instead be made
in annual installments. The amount of each annual installment shall be
equal to the lesser of (a) the full amount of the lump-sum payment, less
the amount of any annual installments previously made under this Paragraph,
or (b) the portion of such lump-sum payment which would be deductible by
the Company at the time it is paid. Each such annual installment shall be
paid on the last day of the calendar year or such other date as the
Committee shall determine.
9. CHANGE IN CONTROL. Notwithstanding the foregoing provisions of
Paragraph 6 hereof, Employee shall be treated as having completed ten (10)
Years of Service on and after a Change in Control of the Company. provided
Employee is then an employee of the Company or is receiving a Disability
Benefit at the time of such Change in Control. Such a "Change in Control"
of the Company shall be deemed to have occurred if any of the following
shall have taken place: (a) a change in control is reported by the Company
in response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act")
or Item 1 of Form 8-K promulgated under the Exchange Act; (b) any "person"
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power of
the Company's then-outstanding securities; or (c) following the election or
removal of directors, a majority of the Board of Directors consists of
individuals who were not members of the Board of Directors two (2) years
before such election or removal, unless the election of each director who
is not a director at the beginning of such two-year period has been
approved in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the
two-year period. Any payments due under Subparagraph A or C shall be made
as soon as practicable following a Change in Control, but in no event later
than thirty (30) days after the date of such Change in Control. Any
payments due under Subparagraph B or D shall be made as soon as practicable
following the date Employee terminates employment with the Company, but in
no event later than thirty (30) days after the date Employee terminates
employment with the Company.
A. DISABILITY AT CHANGE IN CONTROL. In the event of a Change in
Control, if Employee is then receiving a Disability Benefit, Employee shall
receive, in lieu of further Disability Benefits, a lump-sum cash payment
equal to the greater of (1) zero and (2) the present value, discounted at
5.5% without mortality assumptions, of the stream of Disability Benefit
payments that would otherwise have been due Employee until Employee's
Normal Retirement Date (assuming, for purposes of this calculation,
Employee's Disability would continue until Employee's Normal Retirement
Date), less the present value, discounted at 5.5% without mortality
assumptions, of the stream of payments, if any, Employee would receive
until Employee's Normal Retirement Date from any individual disability
policy for which premiums are paid by the Company (assuming, for purposes
of this calculation, that such payments would continue until Employee's
Normal Retirement Date). In the event of a Change in Control, if Employee
is suffering a Disability, Employee shall also receive the full unreduced
value of the Retirement Benefit, in lieu of all benefits, other than the
aforementioned lump-sum Disability Benefit, otherwise payable under this
Agreement.
B. DISABILITY AFTER CHANGE IN CONTROL. If Employee suffers a
Disability after a Change in Control, Employee shall receive, in lieu of
Employee's Disability Benefit, a lump-sum cash payment, equal to the
greater of (1) zero and (2) the present value, discounted at 5.5% without
mortality assumptions, of the stream of Disability Benefit payments that
would otherwise have been due Employee until Employee's Normal Retirement
Date (assuming, for purposes of this calculation, Employee's Disability
would continue until Employee's Normal Retirement Date), less the present
value, discounted at 5.5% without mortality assumptions, of the stream of
payments, if any, Employee would receive until Employee's Normal Retirement
Date from any individual disability policy for which premiums are paid by
the Company (assuming, for purposes of this calculation, that such payments
would continue until Employee's Normal Retirement Date). In the event of
Employee's Disability after a Change in Control, Employee shall also
receive the full unreduced value of the Retirement Benefit, in lieu of all
benefits, other than the aforementioned lump-sum Disability Benefit,
otherwise payable under this Agreement.
C. TERMINATED VESTED EMPLOYEE. If Employee (i) has terminated
employment with the Company prior to a Change in Control, (ii) is vested
under this Agreement, (iii) at the time of such Change in Control, is not
receiving a Disability Benefit, and (iv) Employee or Employee's
Beneficiary, as the case may be, has not received any benefits, other than
Disability Benefits, to which Employee is entitled under this Agreement,
then Employee or Employee's Beneficiary, as the case may be, shall receive,
in lieu of all such benefits, including Disability Benefits, the present
value of the Retirement Benefit, Early Retirement Benefit, Unreduced
Termination Benefit or Death Benefit to which Employee or Employee's
Beneficiary, as the case may be, is entitled, discounted to the date of
payment at 5.5% without mortality assumptions (1) from the date Employee
would have attained the age of sixty-two (62) if Employee has terminated
employment and (2) from the date Employee would have attained the age of
fifty-five (55) if Employee is deceased.
D. TERMINATION AFTER CHANGE IN CONTROL. If Employee's termination of
employment with the Company occurs after a Change in Control for reasons
other than Employee's Disability, Employee shall be paid the full unreduced
value of the Retirement Benefit in lieu of all benefits, including
Disability Benefits otherwise payable under this Agreement. Such payment
will be made regardless of (1) the length of time that has elapsed between
the date of the Change in Control and the date of Employee's termination of
employment and (2) whether the termination of employment was voluntary or
involuntary.
E. PARACHUTE PAYMENT. Notwithstanding any provision of this Agreement
to the contrary, the aggregate present value of all parachute payments
payable to or for the benefit of Employee under this Agreement and under
other plans or agreements shall be one dollar ($1.00) less than three (3)
times Employee's base amount, and, to the extent necessary, payments under
this Agreement shall be reduced in order that this limitation not be
exceeded. The terms "parachute payment," "base amount" and "present value"
shall have the meanings assigned thereto under Section 280G of the Code. It
is the intention of this provision to avoid excise taxes on Employee under
Section 4999 of the Code or the disallowance of a deduction to the Company
pursuant to Section 280G of the Code.
10. STATUS OF AGREEMENT. The benefits payable under this Agreement
shall be independent of, and in addition to, any other agreement relating
to Employee's employment that may exist from time to time between the
parties hereto, or any other compensation payable by the Company to
Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto,
nor shall any provision hereof, except as expressly stated, restrict the
right of the Company to discharge Employee or restrict the right of
Employee to terminate Employee's employment.
11. LIFE INSURANCE AND FUNDING. All amounts paid under this Agreement
shall be paid in cash from the general assets of the Company or from an
Executive Benefits Trust established by the Company to assume some or all
of the obligations of the Company hereunder. Benefits payable by the
Company may be reflected on the accounting records of the Company but
Employee shall not have any right, title, or interest whatsoever in or to
any investment reserves or accounts that the Company may establish or
accumulate to aid in providing the benefits described in this Agreement.
The Company in its sole discretion may apply for and procure as owner and
for its own benefit insurance on the life of Employee, in such amounts and
in such forms as the Company may choose. The trustee on behalf of the
Executive Benefits Trust may also hold as owner insurance on the life of
Employee. Employee shall have no interest whatsoever in any such policy or
policies, but at the request of the Company, Employee shall submit to
medical examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom the
Company or the trustee of the Executive Benefits Trust has applied for
insurance. The rights of Employee or Employee's Beneficiary, or estate, to
benefits under this Agreement shall be solely those of an unsecured
creditor of the Company.
12. SALE OF THE COMPANY. The sale of all or substantially all of the
property and assets of the Company other than in the usual and regular
course of its business, or a merger of the Company wherein the Company is
not the "surviving corporation," or any other transaction which in effect
amounts to the sale of the Company, shall not serve to terminate this
Agreement.
13. COMPANY DEFINED. For purposes of this Agreement, the term
"Company" shall also include any corporation which is an "Affiliate" as
defined in Section 1.02(c) of the Plan. Neither the transfer of Employee
from employment by the Company to employment by an Affiliate nor the
transfer of Employee from employment by an Affiliate to employment by the
Company shall be deemed a termination of employment of Employee by the
Company or by an Affiliate.
Further, the employment of Employee shall not be deemed to have been
terminated or interrupted because of Employee's absence from active
employment on account of temporary illness or during authorized vacation or
during temporary leaves of absence granted by the Company for reasons of
professional advancement, education, health or government service, or
during military leave for any period if Employee returns to active
employment within ninety (90) days after the termination of Employee's
military leave, or during any period required to be treated as a leave of
absence by virtue of any valid law or agreement.
14. FORFEITURE OF PAYMENTS BY COMPETITION. Employee agrees that, in
consideration of the benefits provided herein, Employee will not without
the consent of the Company enter into competition with the Company. For
purposes of this Paragraph, Employee shall be deemed to be in competition
if Employee directly or indirectly, whether as consultant, agent, officer,
director, employee or otherwise, enters into an association with another
business enterprise which then is one of the competitors of the Company
respecting one or more of the Company's business activities. The parties
agree that one of the essential considerations for the benefits provided
Employee hereunder is to protect and preserve the goodwill of the Company
and its respective enterprises, and that said goodwill will be
substantially diminished in value if Employee were to enter into
competition with the Company before or within one year after receiving any
benefits under this Agreement.
In the event Employee is deemed to be in competition contrary to the
provisions of this Paragraph, thereupon Employee shall forfeit all rights
to any further payments of benefits under this Agreement and shall be
obligated to repay the Company all benefit payments, except Disability
Benefits, previously received under this Agreement.
In the event of a Change in Control, Employee's obligations under this
Paragraph shall expire and be cancelled, and Employee shall be entitled to
the benefits provided under this Agreement in accordance with the terms of
this Agreement, notwithstanding whether Employee thereafter engages in
competition described in this Paragraph.
15. BENEFICIARY AND ALTERNATIVE BENEFICIARY. If Employee dies prior to
the receipt of benefits to which Employee is due pursuant to this
Agreement, such benefits shall be paid in accordance with Paragraph 2, 3, 5
or 6 above at the time therein specified to such person or persons, or the
survivor thereof, including corporations, unincorporated associations or
trusts, as Employee may have designated by written document delivered to
the Committee and referring to this Agreement (the "Beneficiary"). Employee
may from time to time revoke or change any such designation by written
document delivered to the Committee. If any designation of a Beneficiary or
revocation or change of a designation of a Beneficiary has the effect of
disposing of the community property interest in payments hereunder of
Employee's spouse, the Company has no obligation to honor any such
designation of a Beneficiary or revocation or change in designation of a
Beneficiary absent the written consent of Employee's spouse. If there is no
valid designation of a Beneficiary on file with the Committee at the time
of Employee's death, or if the Beneficiary shall have predeceased Employee
or otherwise cease to exist, such distribution shall be made to Employee's
spouse, if living, otherwise to Employee's estate. If the Beneficiary shall
survive Employee but die before receiving the payment of the benefit
hereunder, such benefit shall be paid to such Beneficiary's estate.
16. BENEFITS AFTER REEMPLOYMENT. If Employee terminates employment
with the Company and is subsequently reemployed by the Company, then upon
Employee's subsequent termination of employment Employee shall receive a
benefit determined under Paragraph 2, 3, 4, 5, 6 or 7 (whichever is
applicable) but reduced by the amount of any payment (except payments of
Disability Benefits), if any, which Employee received prior to Employee's
subsequent termination.
17. WITHHOLDING OF TAXES. The Company may deduct from the amount of
any payment hereunder any taxes required to be withheld by the federal or
any state or local government
18. PROHIBITION AGAINST ASSIGNMENT. The Employee's right to benefits
under this Agreement shall not be assigned, transferred, pledged or
encumbered in any way, and any attempted assignment, transfer, pledge,
encumbrance or other disposition of such benefits shall be null and void
and without effect; PROVIDED, HOWEVER, that the Company may assign this
entire Agreement to any successor to all or substantially all of the
Company's capital stock or business and assets and this Agreement shall be
binding on any such successor.
19. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and Employee,
Employee's heirs, executors, administrators and legal representatives. As
used in this Agreement, the term "successor" shall include any person,
firm, corporation or other business entity which at any time, whether by
merger, purchase or otherwise, acquires all or substantially all of the
assets or business of the Company.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof, and may be modified only by a written instrument executed by both
parties hereto.
21. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
22. FACILITY OF PAYMENT. When Employee or Employee's Beneficiary
(either of which shall be referred to as the "Recipient") is incapacitated
in the judgment of the Committee by reason of physical or mental illness or
infirmity, the Company may make any payments required by this Agreement:
(a) to the Recipient directly; (b) to the guardian of the Recipient's
personal estate; (c) to the custodian of a minor Recipient serving under
the Uniform Gifts to Minors Act of Texas or any other state; or (d) in the
event an inter vivos or testamentary trust is then in existence for the
benefit of any such Recipient, the Company may make any such payments to
the trustee or trustees of any such trust. The Company may make the payment
specified by this Agreement without liability to anyone other than the
specified payee. Employee hereby agrees, on behalf of Employee, Employee's
heirs and assigns, to hold the Company harmless from any liability for
making payments as specified by this Agreement; PROVIDED, HOWEVER, that the
Company shall not be held harmless for payments by the Company which are
made subsequent to the Company's receipt of a citation or other process
issuing out of a court of competent jurisdiction in connection with a suit
instituted by someone for the purpose of recovering or establishing an
interest in such payments.
23. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, in whole or in part, such invalidity shall not affect any
other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full
force and effect. If this Agreement or any portion thereof conflicts with
law or regulation governing the activities of the Company, the Agreement or
appropriate portion thereof shall be deemed invalid and of no force or
effect.
24. CONSENT OF SPOUSE. Employee's spouse is fully aware, understands,
and fully consents and agrees to the provisions of this Agreement and the
Agreement's binding effect upon any community property interest in payments
hereunder, and such awareness, understanding, consent and agreement is
evidenced by such spouse's signing of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement (in
multiple copies) on the day and year first above written.
IMPERIAL HOLLY CORPORATION
By
James C. Kempner
President and Chief Executive Officer
ATTEST:
Secretary
[SEAL]
Employee
Employee's Spouse
Exhibit 10(b)(4)
IMPERIAL HOLLY CORPORATION
SCHEDULE OF SALARY CONTINUATION AGREEMENTS
Name Title
- ----------------------------- -----------------------
Agreements with Full Vesting:
I. H. Kempner, III Chairman of the Board
J. C. Kempner President, Chief Executive Officer
and Chief Financial Officer
R. E. Henderson Vice President and Treasurer
J. R. Skiles Vice President, Distribution
Agreements with Graduated Vesting:
R. W. Hill Executive Vice President
H. J. Smith Executive Vice President,
Sales and Marketing
W. F. Schwer Senior Vice President, Secretary
and General Counsel
W. A. Coker Vice President, Transportation
P. C. Carrothers Senior Vice President, Logistics
IMPERIAL HOLLY CORPORATION
BENEFIT RESTORATION PLAN
(As Amended and Restated Effective August 1, 1994)
Imperial Holly Corporation, a Texas corporation (the
"Company"), hereby amends, restates and continues the Imperial Holly
Corporation Benefit Restoration Plan, as amended and restated August 1,
1990, in the form of the amended and restated Imperial Holly Corporation
Benefit Restoration Plan, effective August 1, 1994, as follows:
ARTICLE I
NAME AND PURPOSE
1.1 NAME. The name of the Plan is the Imperial Holly
Corporation Benefit Restoration Plan (the "Plan"). This Plan will be
maintained as an unfunded pension plan for the benefit of a select group of
management employees within the meaning of Department of Labor Regulations,
Section 2520.104-23, promulgated under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
1.2 PURPOSE. Section 415 of the Internal Revenue Code of
1986, as amended ("Section 415"), imposes limitations on the amount of
retirement benefits which may be paid to certain Employees of the Company
and its participating subsidiaries under the Imperial Holly Corporation
Retirement Plan, as amended and restated effective February 29, 1988, and
as thereafter amended from time to time (the "Retirement Plan"). Effective
January 1, 1989, Section 401(a)(17) of the Internal Revenue Code of 1986,
as amended, limits the annual compensation of each participating Employee
which may be taken into account in computing benefits under the Retirement
Plan for any Plan Year. The purpose of this Plan is to provide additional
benefits to Participants whose retirement benefits under the Retirement
Plan are
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reduced, curtailed or otherwise limited as a result of the limitations
imposed by Section 415 and/or Section 401(a)(17).
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. For purposes of this Plan the following
definitions shall be applicable:
(a) "Employee" shall mean any person who is regularly
employed on a salaried basis by the Company or by a Subsidiary,
including, but not limited to, any employee who is also an officer
or director of the Company or of a Subsidiary.
(b) "Participant" shall mean an Employee who is designated
as a Participant under the provisions of Article III and who is
entitled to a benefit under the provisions of Article IV of the
Plan.
(c) "Company" shall mean Imperial Holly Corporation.
(d) "Subsidiary" shall mean a corporation, eighty percent
(80%) or more of whose stock is owned (directly or through another
Subsidiary) by Imperial Holly Corporation.
(e) "Board of Directors" shall mean the Board of
Directors of Imperial Holly Corporation.
(f) "Change in Control" shall mean a change in control of
the Company which shall be deemed to have occurred if any of the
following shall have taken place: (a) a change in control is
reported by the Company in response to either Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934 (the "Exchange Act") or Item 1 of Form 8-K promulgated
under the Exchange Act; (b) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting
power of the Company's then outstanding securities; or (c)
following the election or removal of directors, a majority of the
Board of Directors consists of individuals who were not members of
the Board of Directors two years before such election or removal,
unless the election of each director who was not a director at the
beginning of such two-year period has been
-2-
approved in advance by directors representing at least a majority
of the directors then in office who were directors at the beginning of
the two-year period.
(g) "Committee" shall mean the Executive Compensation
Committee designated as such from time to time by the Board of
Directors.
(h) "Participating Employer" shall mean the Company and each
Subsidiary which shall be designated by the Board of Directors of
the Company as a Participating Employer pursuant to Article VII.
(i) "Prior Benefit Restoration Agreements" shall mean the
Benefit Restoration Agreements amending and restating the three
letter agreements, dated June 29, 1983, which provided supplemental
retirement and death benefits to Roy E. Henderson, I. H. Kempner,
III and James R. Skiles, respectively, and the Benefit Restoration
Agreements in favor of Roger W. Hill and James C.
Kempner.
(j) "Compensation" shall mean the amount of a Participant's
base salary which was authorized by the Compensation Committee and
any bonuses and commissions which are actually paid to him by the
Company, but shall exclude any other items of compensation that are
paid to such Participant.
2.2 GENDER AND NUMBER. Except when otherwise indicated by
the context, any masculine terminology used in this Plan shall also include
the feminine gender, and the definition of any term in the singular shall
also include the plural.
2.3 SEVERABILITY. In the event any provision of this Plan
shall be held invalid or illegal for any reason, any illegality or
invalidity shall not affect the remaining provisions of this Plan, but this
Plan shall be construed and enforced as if the illegal or invalid provision
had never been inserted, and the Company shall have the privilege and
opportunity to correct and remedy such questions of illegality or
invalidity by amendment as provided in this Plan.
2.4 PLAN NOT AN EMPLOYMENT CONTRACT. This Plan is not an
employment contract. It does not give any person the right to be continued
in employment, and all employees remain subject to change of salary,
transfer, change of job, discipline, layoff, discharge, or any other change
of employment status.
-3-
ARTICLE III
PARTICIPATION
3.1 PRIOR PARTICIPANTS. Each of the Employees of the Company
identified in Section 2.1(i), with whom the Company has entered into a
Prior Benefit Restoration Agreement, shall become a Participant in this
Plan, as amended from and after August 1, 1994, and the Company's
obligations under the Prior Benefit Restoration Agreements are amended,
restated and continued by this Plan.
3.2 NEW PARTICIPANTS. Any officer or management Employee of
the Company or of another Participating Employer shall become a Participant
in this Plan, as of a date designated by the Committee, when selected as a
Participant by the Committee and approved by the Board of Directors.
ARTICLE IV
BENEFITS
4.1 RETIREMENT PLAN RESTORATION BENEFIT. When a
Participant's retirement benefit commences (or would have commenced except
for the lack of vesting, if applicable) or a death benefit payable with
respect to a Participant commences under the Retirement Plan, the Company
will calculate the single-sum value of his Retirement Plan Restoration
Benefit, which shall equal the excess of the amount of the retirement
benefit or death benefit, as the case may be, which would have been payable
under the Retirement Plan but for the limitations imposed by Section 415 or
Section 401(a)(17) and the lack of vesting, if applicable, over the amount
of the retirement benefit or death benefit payable under the Retirement
Plan.
The retirement benefit or death benefit to be considered in
computing the Retirement Plan Restoration Benefit shall exclude that
portion of the retirement benefit or the
-4-
death benefit (available if the limitations of Section 415 and/or Section
401(a)(17) were not applicable to the Participant) which is attributable to
any compensation (as such term is defined under the Retirement Plan) which
would not be considered Compensation under this Plan. The term "retirement
benefit" includes benefits payable from the Retirement Plan because of a
Participant's disability or vested termination of employment.
4.2 FORM OF PAYMENT AND COMMENCEMENT DATE.
(a) FORM OF PAYMENT. The form of Retirement Plan Restoration
Benefit provided under this Plan shall be the paid in the form of a
lump sum cash payment. Such single sum value of the Retirement Plan
Restoration Benefit shall be determined by applying a 5.5% interest
assumption and such other actuarial assumptions as are then being
utilized under the Retirement Plan to determine actuarially
equivalent benefits to the form of payment chosen by the
Participant under the Retirement Plan.
(b) PAYMENT DATE. The lump sum payment of the Retirement
Plan Restoration Benefit payable under this Plan shall be made
within thirty days after the Participant's retirement, death or
other termination of employment with the Company or another
Participating Employer.
4.3 VESTING. A Participant shall become vested in the
Retirement Plan Restoration Benefits payable under Section 4.1 at the same
time as any such retirement benefits would have become vested under the
Retirement Plan or upon a Change in Control of the Company. Notwithstanding
the provisions of this paragraph 4.3, the Committee may authorize the
Company to enter into a Benefit Restoration Agreement with any specific
Participant which provides for full vesting of benefits under this Plan
regardless of vesting under the Retirement Plan.
4.4 DEATH BENEFITS. No death benefit shall be paid under
this Plan except as provided in this Section 4.4. A death benefit shall be
payable to a surviving spouse or other designated beneficiary of the
Participant if a death benefit is payable to such person under the
-5-
death benefit provisions of the Retirement Plan. The amount of such death
benefit shall be determined under Section 4.1, and such death benefit shall
be payable in a lump sum at the time provided in Section 4.2(b). The
designated beneficiary of a Participant under the Retirement Plan shall be
the designated beneficiary of the Participant under this Plan.
4.5 CHANGE IN CONTROL BENEFITS. Upon a "Change in Control"
of the Company, the Retirement Plan Restoration Benefits of each active
Employee shall become fully vested and shall be payable in a lump sum upon
the subsequent termination of employment of the Employee in an amount equal
to the present value of such unpaid benefits payable to the Employee
discounted at 5.5% per annum.
Notwithstanding other provisions of this Section 4.5, the
aggregate present value of all parachute payments payable to or for the
benefit of a Participant in the Plan, whether payable pursuant to the Plan
or otherwise, shall be limited to three times the Participant's base amount
less one dollar and, to the extent necessary, the acceleration of vesting
and payment of benefits under this Plan shall be reduced by the Company in
order that this limitation not be exceeded. For purposes of this Section
4.5, the terms "parachute payment," "base amount" and "present value" shall
have the meanings assigned thereto under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). It is the intention of this
Section 4.5 to avoid excise taxes on the Participant under Section 4999 of
the Code or the disallowance of a deduction to the Company pursuant to
Section 280G of the Code.
4.6 FUNDING. All amounts paid under this Plan shall be paid
in cash from the general assets of the Company or from an Executive
Benefits Trust established by the Company. Benefits payable by the Company
may be reflected on the accounting records of the Company but no Employee
shall have any right, title, or interest whatsoever in or to any investment
-6-
reserves or accounts that the Company may establish or accumulate to aid in
providing the benefits described in this Plan. The rights of an Employee,
or his Beneficiary or estate, to benefits under the Executive Benefits
Trust shall be solely those of an unsecured creditor.
4.7 TAX WITHHOLDING. The Company may withhold from payments
under this Plan any federal, state, or local taxes required by law to be
withheld with respect to such payments.
4.8 EFFECT ON OTHER PLANS. Amounts accrued or paid under
this Plan shall not be considered compensation for the purpose of the
Company's Retirement Plan, or any other pension plan or life insurance
plans of the Company or a Participating Employer.
4.9 NONALIENATION OF BENEFITS. No right or benefit under
this Plan shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber or charge the same will be void. No right or
benefit hereunder shall be in any manner payable for or subject to any
debts, contracts, liabilities or torts of the person entitled to such
benefits.
ARTICLE V
ADMINISTRATION
5.1 ADMINISTRATION. The Plan shall be administered,
construed and interpreted by the Executive Compensation Committee of the
Board of Directors (the "Committee"). The determinations by the Committee
of the Employees who are eligible to be Participants in the Plan, the
selection of Participants from eligible Employees, the computation of the
amounts of their benefits under the Plan, and the construction and
interpretation by the Committee of any provision of the Plan, shall be
final, conclusive and binding upon all parties, including the Company, its
stockholders and its employees.
-7-
5.2 EXPENSES. The expenses of administering this Plan shall
be borne by the Company.
5.3 INDEMNIFICATION AND EXCULPATION. The members of the
Committee, its agents, officers, directors and employees of the Company and
other Participating Employers and their affiliates, shall be indemnified
and held harmless by the Company against and from any and all loss, cost,
liability or expense that may be imposed upon or reasonably incurred by
them in connection with or resulting from any claim, action, suit, or
proceeding to which they may be a party or in which they may be involved by
reason of any action taken or failure to act under this Plan and against
and from any and all amounts paid by them in settlement (with the Company's
written approval) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding. The foregoing provision shall not be applicable
to any person if the loss, cost, liability or expense is due to such
person's gross negligence or willful misconduct.
ARTICLE VI
MERGER, AMENDMENT AND TERMINATION
6.1 MERGER, CONSOLIDATION OR ACQUISITION. In the event of a
merger, consolidation, or acquisition where the Company is not the
surviving corporation, the successor or acquiring corporation shall assume,
continue and carry on the Plan in the same manner and subject to the same
rights and obligations as the Company would have had if the merger,
consolidation or acquisition had not taken place.
6.2 AMENDMENT AND TERMINATION. The Directors of the Company
may amend, modify, or terminate this Plan at any time. In the event of a
termination of the Plan pursuant to this Section 6.2, unpaid benefits shall
continue to be an obligation of the Company and shall be paid as scheduled.
-8-
ARTICLE VII
PARTICIPATING EMPLOYERS
7.1 DESIGNATION PROCEDURE. The Board of Directors of the
Company may designate any Subsidiary as a Participating Employer in order
that its Employees may be selected as Participants under the Plan. Each
such Participating Employer shall assume no liability as a result of such
appointment and the Company shall have the obligation to pay all benefits
provided by this Plan, including benefits payable to Participants who are
Employees of other Participating Employers.
7.2 TERMINATION OF PARTICIPATING EMPLOYER. The Board of
Directors of the Company may terminate the designation of any Subsidiary as
a Participating Employer by giving ninety (90) days' notice in writing of
such termination to the Subsidiary, but such termination shall not reduce
the benefits payable hereunder to any Employee of the Subsidiary.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 BINDING EFFECT. The benefits and obligations under this
Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and each Participant, his spouse, heirs, executors,
administrators and legal representatives.
8.2 APPLICABLE LAW. This Plan shall be construed in accordance
with and governed by the law of the State of Texas.
-9-
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its duly authorized officers this 29th day of September, 1994,
but effective August 1, 1994.
IMPERIAL HOLLY CORPORATION
By
James C. Kempner
President & Chief Executive Officer
ATTEST:
W. F. SCHWER
W. F. Schwer
Secretary
[SEAL]
Exhibit 10(c)(2)
BENEFIT RESTORATION AGREEMENT
(As Amended and Restated August , 1994)
THIS AGREEMENT (this "Agreement"), made this _____ day of ________ , 199_,
by and between IMPERIAL HOLLY CORPORATION, a Texas corporation (the "Company"),
and _____________________________ ("Employee");
W I T N E S S E T H:
WHEREAS, the Company has established a Benefit Restoration Plan, as
amended and restated effective August 1, 1990, and as thereafter amended
from time to time (the "Plan"), to restore retirement and death benefits
lost under the Retirement Plan due to limitations under certain provisions
of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Executive Compensation Committee (the "Committee") of the
Board of Directors of the Company has selected Employee to participate in
the Plan;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the Company and Employee agree as follows:
1. TERMS. Terms not otherwise defined herein shall have the same
meaning as ascribed thereto in the Plan.
2. REFERENCE TO PLAN. This Agreement is being entered into in
accordance with and subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are still in effect on the date
hereof. Employee has received a copy of, and is familiar with the terms of,
the Plan and any such administrative interpretations, which are hereby
incorporated herein by reference.
3. VESTING. Upon execution of this Agreement by the Company, Employee
shall be fully vested in the Retirement Plan Restoration Benefits provided
Employee under the Plan regardless of the vesting schedule provided under
the Retirement Plan.
4. LIFE INSURANCE AND FUNDING. All amounts paid under this Agreement
shall be paid in cash from the general assets of the Company or from an
Executive Benefits Trust established by the Company to assume some or all
of the obligations of the Company hereunder. Benefits payable by the
Company may be reflected on the accounting records of the Company but
Employee shall not have any right, title, or interest whatsoever in or to
any investment reserves or accounts that the Company may establish or
accumulate to aid in providing the benefits described in this Agreement.
The Company in its sole discretion may apply for and procure as owner and
for its own benefit insurance on the life of Employee, in such amounts and
in such forms as the Company may choose. The trustee on behalf of the
Executive Benefits Trust may also hold as owner insurance on the life of
Employee. Employee shall have no interest whatsoever in any such policy or
policies, but at the request of the Company, Employee shall submit to
medical examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom the
Company or the trustee of the Executive Benefits Trust has applied for
insurance. The rights of Employee or Employee's beneficiary, or estate, to
benefits under this Agreement shall be solely those of an unsecured
creditor of the Company.
5. STATUS OF AGREEMENT. The benefits payable under this Agreement
shall be independent of, and in addition to, any other agreement relating
to Employee's employment that may exist from time to time between the
parties hereto, or any other compensation payable by the Company to
Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto,
nor shall any provision hereof, except as expressly stated, restrict the
right of the Company to discharge Employee or restrict the right of
Employee to terminate Employee's employment.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof, and, subject to Section 9 hereof, may be modified only by a written
instrument executed by both parties hereto.
7. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, in whole or in part, such invalidity shall not affect any
other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full
force and effect. If this Agreement or any portion thereof conflicts with
law or regulation governing the activities of the Company, this Agreement
or appropriate portion thereof shall be deemed invalid and of no force or
effect.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
9. AMENDMENT. The Company may at any time and from time to time,
modify or amend, in whole or in part, any or all of the provisions of the
Plan, provided, that, unless the Company receives Employee's prior written
consent, any such modification or amendment shall only prospectively affect
the obligations and benefits under this Agreement and the Plan. In
addition, the Company may at any time terminate the Plan. In the event of a
termination of the Plan, unpaid benefits shall continue to be an obligation
of the Company and shall be paid as scheduled..
IN WITNESS WHEREOF, the parties have executed this Agreement
(in multiple copies) on the day and year first above written.
IMPERIAL HOLLY CORPORATION
By
James C. Kempner
President and Chief Executive Officer
ATTEST:
Secretary
[SEAL]
Employee
Exhibit 10(c)(3)
BENEFIT RESTORATION AGREEMENT
(As Amended and Restated August 1, 1994)
THIS AGREEMENT (this "Agreement"), made this 1st day of
August 1994, by and between IMPERIAL HOLLY CORPORATION, a Texas corporation
(the "Company"), and _________________________________________ ("Employee");
W I T N E S S E T H:
WHEREAS, the Company has established a Benefit Restoration Plan, as
amended and restated effective August 1, 1990, and as thereafter amended
from time to time (the "Plan"), to restore retirement and death benefits
lost under the Retirement Plan due to limitations under certain provisions
of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Executive Compensation Committee (the "Committee") of the
Board of Directors of the Company has selected Employee to participate in
the Plan;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the Company and Employee agree as follows:
1. TERMS. Terms not otherwise defined herein shall have the same
meaning as ascribed thereto in the Plan.
2. REFERENCE TO PLAN. This Agreement is being entered into in
accordance with and subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are still in effect on the date
hereof. Employee has received a copy of, and is familiar with the terms of,
the Plan and any such administrative interpretations, which are hereby
incorporated herein by reference.
3. VESTING. Employee shall become vested in the Retirement Plan
Restoration Benefits provided Employee under the Plan (i) at the same time
as Employee becomes vested under the Retirement Plan and (ii) upon a Change
of Control.
4. LIFE INSURANCE AND FUNDING. All amounts paid under this Agreement
shall be paid in cash from the general assets of the Company or from an
Executive Benefits Trust established by the Company to assume some or all
of the obligations of the Company hereunder. Benefits payable by the
Company may be reflected on the accounting records of the Company but
Employee shall not have any right, title, or interest whatsoever in or to
any investment reserves or accounts that the Company may establish or
accumulate to aid in providing the benefits described in this Agreement.
The Company in its sole discretion may apply for and procure as owner and
for its own benefit insurance on the life of Employee, in such amounts and
in such forms as the Company may choose. The trustee on behalf of the
Executive Benefits Trust may also hold as owner insurance on the life of
Employee. Employee shall have no interest whatsoever in any such policy or
policies, but at the request of the Company, Employee shall submit to
medical examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom the
Company or the trustee of the Executive Benefits Trust has applied for
insurance. The rights of Employee or Employee's beneficiary, or estate, to
benefits under this Agreement shall be solely those of an unsecured
creditor of the Company.
5. STATUS OF AGREEMENT. The benefits payable under this Agreement
shall be independent of, and in addition to, any other agreement relating
to Employee's employment that may exist from time to time between the
parties hereto, or any other compensation payable by the Company to
Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto,
nor shall any provision hereof, except as expressly stated, restrict the
right of the Company to discharge Employee or restrict the right of
Employee to terminate Employee's employment.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof, and, subject to Section 9 hereof, may be modified only by a written
instrument executed by both parties hereto.
7. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, in whole or in part, such invalidity shall not affect any
other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full
force and effect. If this Agreement or any portion thereof conflicts with
law or regulation governing the activities of the Company, this Agreement
or appropriate portion thereof shall be deemed invalid and of no force or
effect.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
9. AMENDMENT. The Company may at any time and from time to time,
modify or amend, in whole or in part, any or all of the provisions of the
Plan, provided, that, unless the Company receives Employee's prior written
consent, any such modification or amendment shall only prospectively affect
the obligations and benefits under this Agreement and the Plan. In
addition, the Company may at any time terminate the Plan. In the event of a
termination of the Plan, unpaid benefits shall continue to be an obligation
of the Company and shall be paid as scheduled..
IN WITNESS WHEREOF, the parties have executed this Agreement (in
multiple copies) on the day and year first above written.
IMPERIAL HOLLY CORPORATION
By
James C. Kempner
President and Chief Executive Officer
ATTEST:
Secretary
[SEAL]
Employee
Exhibit 10(c)(4)
IMPERIAL HOLLY CORPORATION
SCHEDULE OF BENEFIT RESTORATION AGREEMENTS
Name Title
____________________ _________________________________
Agreements with Full Vesting:
I. H. Kempner, III Chairman of the Board
J. C. Kempner President, Chief Executive Officer
and Chief Financial Officer
R. W. Hill Executive Vice President
W. F. Schwer Senior Vice President, Secretary
and General Counsel
R. E. Henderson Vice President and Treasurer
J. R. Skiles Vice President, Distribution
Agreements with Graduated Vesting:
H. J. Smith Executive Vice President,
Sales and Marketing
P. C. Carrothers Senior Vice President, Logistics
Exhibit 10(d)(1)
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT (this "Agreement"), made and entered into as of the 1st
day of August, 1994, by and between IMPERIAL HOLLY CORPORATION, a Texas
corporation, and ______________________________________ ("Employee"), an
individual residing in _________________ County, ___________________________;
W I T N E S S E T H:
WHEREAS, the Company wishes to secure the continued services of
Employee and, subject to the provisions of this Agreement, desires to
provide a benefit to Employee in the event of Employee's involuntary
termination or Termination for Good Reason after a Change in Control of the
Company, as such terms are hereinafter defined;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Affiliate" means (i) any corporation in which the shares owned or
controlled, directly or indirectly, by the Company represent eighty percent
(80%) or more of the voting power of the issued and outstanding capital
stock of such corporation, (ii) any corporation which owns or controls,
directly or indirectly, eighty percent (80%) or more of the voting power of
the issued and outstanding capital stock of the Company, and (iii) any
corporation in which eighty percent (80%) or more of the voting power of
the issued and outstanding capital stock is owned or controlled, directly
or indirectly, by any corporation which owns or controls, directly or
indirectly, eighty percent (80%) or more of the voting power of the issued
and outstanding capital stock of the Company.
(b) The Company shall have "Cause" to terminate Employee's employment
with the Company (i) if Employee grossly and deliberately disregards
Employee's duties and responsibilities as an officer of the Company, (ii)
if Employee engages in an act or acts of dishonesty constituting a felony
which adversely affects the Company or (iii) for any reason which
constitutes cause under any written employment agreement between Employee
and the Company that was entered into prior to the Effective Date of the
Change of Control. Notwithstanding the foregoing, Employee shall not be
deemed to have been terminated for Cause unless and until Employee shall
have received a copy of a resolution duly adopted by the affirmative vote
of two-thirds of the entire membership of the Board of Directors finding
that in the good faith opinion of the Board of Directors the Company has
Cause to terminate Employee's employment with the Company. For the purposes
of this subsection (b), Employee shall not be considered to have
disregarded Employee's duties and responsibilities as an officer of the
Company if (i) there is a Termination For Good Reason or by reason of (ii)
Employee's reasonable participation in volunteer services for a church or
other charitable, educational or civic organization, (iii) Employee's
reasonable participation as a director of any corporation, or (iv) any
absence from employment because of Employee's illness, incapacity,
Disability or reasonable vacation periods.
(c) "Company" means Imperial Holly Corporation, a Texas corporation,
or any successor and its Affiliates.
(d) A "Change in Control" shall be deemed to have occurred if any of
the following shall have taken place: (i) change in control is reported by
the Company in response to either Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or Item 1 of Form 8-K promulgated under the Exchange Act;
(ii) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing forty percent (40%) or more of the combined voting
power of the Company's then outstanding securities; or (iii) following the
election or removal of directors, a majority of the Board of Directors
consists of individuals who were not members of the Board of Directors two
(2) years before such election or removal, unless the election of each
director who was not a director at the beginning of such two-year period
has been approved in advance by directors representing at least a majority
of the directors then in office who were directors at the beginning of the
two-year period.
(e) "Disability" means Employee's inability to fulfill Employee's
duties and responsibilities as an officer of the Company due to physical or
mental disability which continues for 180 consecutive days or more, or for
an aggregate of 180 days in any period of twelve months. Evidence of such
disability shall be certified by a physician acceptable to both the Company
and Employee.
(f) The "Effective Date" of a Change in Control shall mean the date of
occurrence of the specified event constituting such Change in Control.
(g) "Involuntary Termination of Employment" means an involuntary
termination of employment of Employee by the Company and shall include
Employee's Termination for Good Reason. Notwithstanding the foregoing,
Involuntary Termination of Employment shall not include termination of
Employee's employment by reason of death, Disability or Cause.
(h) "Termination for Good Reason" means Employee's termination of
employment with the Company following the occurrence of any of the
following events that occurs on or after the Effective Date of a Change in
Control without Employee's prior written consent:
(i) a diminution of Employee's duties and responsibilities
from those assigned to Employee immediately prior to the
Effective Date of the Change in Control.
(ii) a reduction in Employee's salary from the rate in
effect immediately prior to the Effective Date of the Change in
Control or, except for any reduction applied as part of any
Company-wide policy, a reduction in Employee's other compensation
or benefits (other than salary) from those available to Employee
immediately prior to the Effective Date of the Change in Control;
(iii) a relocation of Employee's primary office from the
metropolitan area of its location on the Effective Date of the
Change in Control;
(iv) an excessive increase in Employee's travel on behalf of
the Company, which increase shall be deemed to occur if the
discharge of Employee's assigned duties and responsibilities
requires Employee to travel and/or work outside the city in which
Employee's principal office is located otherwise than as Employee
was required to travel and/or work in the ordinary course of the
performance of the duties and responsibilities assigned to
Employee immediately prior to the Effective Date of the Change in
Control; or
(v) the failure of the Company to obtain the unconditional
assumption in writing or by operation of law of the Company's
obligations to Employee under this Agreement by any successor
prior to or at the time of a reorganization, merger,
consolidation, or disposition of all or substantially all of the
assets of the Company or similar transaction.
2. CHANGE IN CONTROL BENEFIT. In the event Employee experiences an
Involuntary Termination of Employment during the period commencing on the
Effective Date of a Change in Control and ending one year after that date,
Employee shall be entitled to receive, within 30 days after Employee's
Involuntary Termination of Employment a lump sum payment equal to three
times Employee's base amount, minus $1.00. The term "base amount", as used
herein, shall have the meaning assigned thereto under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code").
3. REDUCTION OF PAYMENTS. The Company and Employee understand that the
benefits under this Agreement may constitute parachute payments. The
Company and Employee agree that the aggregate present value of all
parachute payments payable to or for the benefit of Employee under this
Agreement and under all other plans or agreements shall not exceed the
limit described in paragraph 2 above and, to the extent necessary, payments
under this Agreement shall be reduced in order that this limitation not be
exceeded. The terms "parachute payment" and "present value", as used
herein, shall have the meanings assigned thereto under Section 280G of the
Code. It is the intention of this paragraph to avoid excise taxes on
Employee under Section 4999 of the Code and the disallowance of a deduction
to the Company pursuant to Section 280G of the Code.
4. EVENTS TERMINATING THIS AGREEMENT.
(a) If Employee's employment with the Company is terminated for any
reason before the Effective Date of a Change in Control, this Agreement
shall terminate upon the date of termination of Employee's employment and
Employee shall not be entitled to any benefits or payments under this
Agreement.
(b) If Employee's employment with the Company terminates on or after
the Effective Date of a Change in Control due to Employee's (i) Disability,
(ii) termination by the Company for Cause, (iii) death, or (iv) voluntary
termination for reasons other than Termination for Good Reason, Employee
shall not be entitled to receive any payments or benefits under this
Agreement.
5. STATUS OF AGREEMENT. The benefits payable under this Agreement
shall be independent of, and in addition to, any other agreement relating
to Employee's employment that may exist from time to time between the
parties hereto, or any other compensation payable by the Company to
Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto,
nor shall any provision hereof, except as expressly stated, restrict the
right of the Company to discharge Employee or restrict the right of
Employee to terminate his employment.
6. TERM OF AGREEMENT. Subject to Employee's earlier termination of
employment with the Company, as provided herein, this Agreement shall
remain in effect until August 1, 1998, and shall be automatically renewed
and extended for successive one- year terms commencing on August 1 until
the Company, acting upon the directions of the Board of Directors, gives
Employee written notice of its decision not to renew this Agreement for the
following term PROVIDED that such notice is delivered to Employee at least
90 days before the then current term expires. Notwithstanding the
foregoing, if this Agreement is in effect as of the Effective Date of a
Change in Control, this Agreement shall automatically be renewed for an
additional one-year term as of the Effective Date of a Change in Control
and may not be terminated by the Company until the completion of such
one-year term.
7. SOURCE OF PAYMENTS. All payments provided in this Agreement shall
be paid in cash from the general funds of the Company. Employee shall have
no right, title, or interest whatsoever in or to any investments which the
Company may make to aid the Company in meeting its obligations hereunder.
Employee shall cooperate and provide to the Company any documentation as
may be required to aid the Company in meeting its obligations hereunder.
Nothing contained in this Agreement, and no action taken pursuant to this
paragraph, shall create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and Employee or any other
person. The rights of Employee or Employee's estate to benefits under this
Agreement shall be solely those of an unsecured creditor of the Company.
8. SALE OF THE COMPANY. The sale of all or substantially all of the
property and assets of the Company otherwise than in the usual and regular
course of its business, or a merger of the Company wherein the Company is
not the "surviving corporation" or any other transaction which in effect
amounts to the sale of the Company, shall not serve to terminate this
Agreement.
9. TERMINATION FOR CAUSE. The Company may terminate Employee's
employment at any time for Cause, in which event Employee shall not be
entitled to receive any payments or other benefits under this Agreement.
10. DEATH OF EMPLOYEE. In the event Employee dies subsequent to
Employee's entitlement to benefits under this Agreement but prior to the
payment of such benefits, such benefits payable to Employee shall be paid
to Employee's estate.
11. WITHHOLDING OF TAXES. The Company may deduct from the amount of
any benefits payable hereunder any taxes required to be withheld by the
federal or any state or local government.
12. PROHIBITION AGAINST ASSIGNMENT. The right of Employee to benefits
under this Agreement shall not be assigned, transferred, pledged or
encumbered in any way, and any attempted assignment, transfer, pledge,
encumbrance or other disposition of such benefits shall be null and void
and without effect; provided, however, that the Company may assign this
entire Agreement to any successor to all or substantially all of the
Company's capital stock or business and assets and this Agreement shall be
binding on any such successor.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and Employee, his
heirs, executors, administrators and legal representatives. As used in this
Agreement, the term "successor" shall include any person, firm, corporation
or other business entity which at any time, whether by merger, purchase or
otherwise, acquires all or substantially all of the assets or business of
the Company.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between parties hereto with respect to the subject matter
hereof, and may be modified only by a written instrument executed by both
parties hereto.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
16. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, in whole or in part, such invalidity shall not affect any
other provision of this Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full
force and effect. If this Agreement or any portion thereof conflicts with
law or regulation governing the activities of the Company, the Agreement or
appropriate portion thereof shall be deemed invalid and of no force or
effect.
17. CONFIDENTIALITY. Employee shall retain in confidence any and all
confidential information known to him concerning the Company and its
business so long as such information is not otherwise publicly disclosed.
IN WITNESS THEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and Employee has signed this Agreement, all as of the day and
year first above written.
IMPERIAL HOLLY CORPORATION
By
James C. Kempner
President, and Chief Executive Officer
ATTEST:
Secretary
[SEAL]
Employee
Exhibit 10(d)(2)
IMPERIAL HOLLY CORPORATION
SCHEDULE OF CHANGE OF CONTROL AGREEMENTS
Name Title
____________________ _________________________________
R. E. Henderson Vice President and Treasurer
W. M Krocak Vice President, Human Resources
B. T. Harrison Vice President, Refinery Operations
H. P. Mechler Controller
O. W. Meyers, III Vice President, Corporate Finance
R. F. Silva Vice President, Product Development
P. C. Carrothers Senior Vice President, Logistics
W. J. Anderson Vice President, Engineering Services
Exhibit 11
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
(UNAUDITED)
Three Months Six Months
Ended Ended
September 30 September 30
1994 1994
-------------- --------------
(In Thousands of Dollars)
NET INCOME (LOSS) FOR PRIMARY AND
FULLY DILUTED COMPUTATION:
As reported .............................. $ (1,140) $ (144)
Adjustments - none ....................... -- --
------------ ------------
As adjusted .............................. $ (1,140) $ (144)
============ ============
PRIMARY EARNINGS (LOSS) PER SHARE:
Weighted average shares of common
stock outstanding ...................... 10,262,336 10,259,350
Incremental shares issuable from
assumed exercise of stock options
under the treasury stock method ........ 32,074 31,942
------------ ------------
Weighted average shares of common
stock outstanding, as adjusted ......... 10,294,410 10,291,292
============ ============
Primary earnings (loss) per share ........ $ (0.11) $ (0.01)
============ ============
FULLY DILUTED EARNINGS (LOSS) PER SHARE:
Weighted average shares of common
stock outstanding ...................... 10,262,336 10,259,350
Incremental shares issuable from
assumed exercise of stock options
under the treasury stock method ........ 46,522 46,522
------------ ------------
Weighted average shares of common
stock outstanding, as adjusted ......... 10,308,858 10,305,872
============ ============
Fully diluted earnings (loss)
per share .............................. $ (0.11) $ (0.01)
============ ============
This calculation is submitted in accordance with Item 601(b)(11) of
Regulation S-K; the amount of dilution illustrated in this calculation is
not required to be disclosed pursuant to paragraph 14 of Accounting
Principles Board Opinion No. 15.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the Company's
unaudited condensed consolidated financial statements for the six months ended
September 30, 1994 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 1,973
<SECURITIES> 30,137
<RECEIVABLES> 51,075
<ALLOWANCES> 0
<INVENTORY> 84,591
<CURRENT-ASSETS> 195,644
<PP&E> 270,204
<DEPRECIATION> 131,904
<TOTAL-ASSETS> 350,373
<CURRENT-LIABILITIES> 110,625
<BONDS> 100,019
<COMMON> 31,884
0
0
<OTHER-SE> 81,957
<TOTAL-LIABILITY-AND-EQUITY> 350,373
<SALES> 311,396
<TOTAL-REVENUES> 311,396
<CGS> 282,567
<TOTAL-COSTS> 282,567
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,187
<INCOME-PRETAX> (246)
<INCOME-TAX> (102)
<INCOME-CONTINUING> (144)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (144)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
